VMware clampdown on free ESXi may prompt defection to Hyper-V

A dustup between VMware and Veeam Software over support for the free ESXi hypervisor highlights the challenges of selling virtualization to small businesses.

VMware has told Veeam Software to stop supporting the free version of ESXi in its new Veeam Backup and Replication 3.1 product, a move that may push cash-strapped small businesses to Microsoft's rival hypervisor. Due this fall, Microsoft Hyper V-R2 will include live migration and high-availability features.

VMware Inc. currently offers its hypervisor in three configurations: the traditional ESX, which includes a Linux-based service console; ESXi, which strips out the service console and is managed remotely but can be used as part of a full VMware Infrastructure 3 or vSphere deployment; and a free version of ESXi, which is limited to single-server deployments and does not support remote management of any kind.

VMware Inc.'s move to restrict support for free ESXi calls into question the company's goal for the free hypervisor: Is it intended as a simple trial or evaluation product that will eventually convert to a paid license, or is it designed for production deployments -- albeit very basic ones?

VMware Inc.'s move to restrict support for free ESXi calls into question the company's goal for the free hypervisor.
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But first, the back story.

On Wednesday, Veeam announced Backup and Replication Essentials bundles that support paid versions of VMware vSphere 4 ESX/ESXi. At that time, Veeam said it would not back up free ESXi 4.0, at VMware's request. The company will, however, continue to support free ESXi for customers of Veeam Backup 3.0, announced in February.

Doug Hazelman, Veeam's director of the global systems engineering group, characterized VMware's move as financially motivated. "We saw really decent sales [from our ESXi free support], and were getting some love for it," Hazelman said. But he believes VMware wasn't seeing enough free ESXi downloads converting in to paid versions. "By allowing people to do advanced functionality, we were eating into that conversion."

VMware protecting its turf
But money doesn't tell the whole story, according to VMware. It's also about maintaining quality control of the platform.

"We provide certain APIs [application programming interfaces] and methods particular to the virtualization environment," said Patrick Lin, the vice president of product management for VMware's server business unit. By offering access to the hypervisor via a preferred set of APIs, "our intent is to provide a level playing field in the basis of backup," he said.

But Veeam did not use VMware-approved methods to develop its product, said Parag Patel, VMware's vice president of alliances. "We're not exactly sure what they did, but it didn't seem sound," Patel said. "For us it's a question of what's built and how it's built. … To be perfectly honest, we didn't want to be associated with it because it wasn't satisfactory."

Perhaps more to the point, Veeam Backup is inconsistent with VMware's vision of free ESXi deployments. "It's meant to be a starter … walk before you run," Patel said. "It's not supposed to be for complex software environments." With free ESXi, "you shouldn't need a whole lot of other tools to make it work." If you do, you are free to upgrade.

Tony Iams, a senior analyst at Ideas International, said he understood the market appeal of free ESXi users for Veeam. But "any time you take advantage of undocumented APIs, you do so at your own peril," He said. And while VMware's move to restrict Veeam's product could be construed as "aggressive," it could just have easily made "radical changes to the next version of free ESXi and that would have also caused some dramatic problems for [Veeam]," Iams said.

The situation reminded Iams of the good old days, when Microsoft was the vendor punishing partners for using undocumented APIs. The difference, though, is "Microsoft was a monopoly. VMware is the market leader, but they're not a monopoly," he said.

Impact on small businesses
VMware and partner infighting aside, the decision to restrict Veeam Backup to paid versions of ESX/ESXi will have an effect on which platform value-added resellers recommend to its customers, said Craig Stein, chief solutions architect at the Mirazon Group, an IT consultancy in Louisville, Ken. that recommended Veeam Backup to its small-business customers.

As a Microsoft Gold and VMware Enterprise partner, Veeam's support for free ESXi "was the deciding factor in what virtualization platform we recommended," Stein said. "Veeam gives very small companies with a single server the same recovery capabilities as larger companies."

But now, without support for Veeam Backup, "there's no compelling reason for [users] to upgrade to free ESXi 4," Stein said. "It works very well, so there's no technical reason to upgrade, and Veeam will continue to support them." And with Hyper-V R2 just around the corner, Stein said many customers have been asking him when Veeam will support Microsoft's platform.

"If it weren't for Veeam, we would be recommending Hyper-V just as often," Stein said. Running in his lab, Hyper-V has demonstrated good performance compared with ESX 3.5, particularly with 64-bit guest operating systems.

In other words, "this was a shortsighted decision to grab some business from small businesses, but the effect will be to drive people to the competitive product," Stein said.

On the other hand, Ideas International's Iams said the paid versions of VMware's new vSphere 4 actually represent a boon to small and medium-sized businesses. "VMware's new Essentials bundles are a more flexible and compelling price point at the low end," he said. "Before, with the Foundation Edition, small businesses tended to pay for more than what they needed."

VMware vSphere 4 Essentials comes in flavors: Essentials, and Essentials Plus. The former is $995 for three two-way servers, and includes a vCenter Server agent, VMware Consolidated Backup (VCB), Update Manager, and vCenter Server for Essentials. Essentials Plus lists for $2,995 for three servers, and adds VMware HA and Data Recovery.

But it's too early to tell whether free ESXi users will bite on the new vSphere 4 Essentials bundles, Iams said. That leaves VMware riding a fine line: "They want to get paid for their genuine added value, but they don't want to be so exclusive that they shut out a new stream of users."

Let us know what you think about the story; email: Alex Barrett, News Director.

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