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VMware vSphere Essentials Plus licenses surge, but SMBs want more

Beth Pariseau
VMware says its effort to appeal to smaller customers has borne fruit, but users still want more.

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In July, VMware added its live migration feature, vMotion, to its Essentials Plus license, which the company said has boosted sales. But at a recent New England Area VMware Users Group meeting, attendees said that small and medium-sized businesses (SMBs) want more than live migration as they become more sophisticated with virtualization.

According to VMware CFO Mark Peek, who spoke to investors on a recent company earnings call, demand for Essentials Plus increased (though specific revenue numbers weren't broken out by edition) in the third quarter, and purchases of Enterprise-level licenses continued to grow.

"We were actually a little bit surprised at how well Essentials Plus performed relative to Essentials, and there is a fairly significant gap in [price] between the two," Peek said. "We don't know what the fourth quarter will hold, and in fact, we would like to see a bit more mix shift into Essentials."

With the release of vSphere 4.1, VMware made pricing changes for its Essentials and Essentials Plus editions. The changes made permanent the sale price of $495 for Essentials, and added vMotion to Essentials Plus while also raising the price to $3,495 for the licensing package. Both licensing editions cover up to six processors and up to three physical hosts. Essentials features include four-way symmetric multiprocessing (vSMP); a vCenter agent; vStorage APIs for Data Protection; Update Manager; and thin provisioning. Essentials Plus offers the same features, plus vMotion, High Availability and Data Recovery.

Still, the cheapest deals on server virtualization on the market right now lie with VMware's competitors, which offer things like high availability and live migration away with free hypervisors. SMBs that have chosen vSphere say they did so for product features and maturity, not just for a lower price, though they would like to see VMware continue to reduce its pricing for additional features.

Where's Essentials Plus-Plus?
The Amherst School District in Amherst,, N.H., could be a candidate for an Enterprise Plus licensing, with an environment that consists of six physical hosts broken into three clusters in each of the district's three schools, which together serves some 1,600 students. But the district runs vSphere at the Advanced license level, which includes VMware Fault Tolerance, according to Jason Lozzi , network and systems administrator. "We may be a small school district, but we want to maintain a high availability rate for users," he said.

Likewise, by most measures, Regiment Capital Advisors SP in Boston, Mass., is an SMB. The 40-employee firm has a total of 24 virtual machines on three ESX hosts at its headquarters, as well as a single ESX server with two VMs at a small remote office in New York. According to Jay Hanley, an IT manager, the firm uses "the Enterprise license -- always," specifically for the Storage VMotion and Distributed Resource Scheduling (DRS) features.

We want vMotion's flexibility for our storage, too.

Greg Masiello,
systems security specialistMasy Systems Inc.

DRS, Hanley pointed out, is especially useful for a small shop with limited resources for provisioning and load-balancing new VMs.

"We have a very lean IT department. We don't go into vCenter every day. We don't want to spend unnecessary resources on load-balancing or go through an exercise every time we have to add a machine to figure out its resource utilization. We want to just spin up a new VM and let DRS figure out where it's going to go," Hanley said.

Hanley said he thought features like DRS, Storage VMotion and Fault Tolerance should be put into lower-level licensing editions. "The whole selling point of virtualization is availability and flexibility . These are technologies you want to leverage no matter what size company you are."

Essentials Plus appeals to virtualization beginners
Masy Systems Inc. uses Essentials Plus -- for now. The 50-employee provider of validation and calibration services for the biotech and pharmaceutical industries just deployed virtualization in a two-host cluster earlier this month, said Greg Masiello, systems security specialist for Pepperell, Mass.-based firm, and he anticipates needing features such as Storage VMotion and Fault Tolerance as the company progresses in its deployment.

"Having vMotion has been great," Masiello said. "But we can't have downtime, including for maintenance, and we want vMotion's flexibility for our storage, too."

Chris Chesley, a solutions architect at the Kittery, Maine-based value-added reseller GreenPages Technology Solutions, said that among his firm's clients, he's seen a pattern similar to that at Masy Systems. "Essentials Plus with vMotion appeals to people just starting out and getting their feet wet, but as they get more robust, they tend to upgrade to the more robust editions," he said. "It doesn't matter the size of company."

Meanwhile, as reflected in VMware's earnings, the discounted Essentials package warranted few mentions at the VMUG meeting. The Springfield, Mass.-based law firm Robinson and Donovan PC is using the free version of VMware's hypervisor with direct-attached storage. Chuck Baranowski, information systems manager for the firm said he was looking into moving to a networked storage environment, in which case, he would skip Essentials in favor of Essentials Plus. "I'd probably go with Essentials Plus with vMotion on three nodes for a SAN," he said.

Though the response of the market so far has been a clear demand for lower pricing with richer features, Peek's remarks on the earnings call indicate VMware isn't inclined to lower prices again soon, or offer many deal-sweeteners in sales negotiations for the near future. The company has been maintaining its margins, Peek told investors, in part through "dogged discipline around discounting" last quarter.

Beth Pariseau is a senior news writer for SearchServerVirtualization.com. Write to her at bpariseau@techtarget.com.


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