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Citrix simplifies XenServer pricing model; VMware to follow?

Citrix has simplified its XenServer pricing model so that users can deploy an unlimited number of virtual machines per server at a single price. Will the move place pressure on VMware to lower its pricing?

On Monday, March 31, Santa Clara, Calif.-based Citrix Systems Inc. announced the availability of Citrix XenServer 4.1. The release includes minor enhancements and a major pricing change.

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This is the company's first release since Citrix's late-2007 acquisition of XenSource. Additionally, Citrix announced a feature in XenServer 4.1 coordination with NetApp that makes XenServer aware of network storage.

Citrix has changed its pricing model from per socket to per server, regardless of the number of sockets or processing cores on the system.

Now customers can deploy an unlimited number of virtual machines or guest operating systems on each physical server for a single price. The new pricing applies to the Standard, Enterprise and Platinum editions of Citrix XenServer. A free Express Edition of XenServer is also available for unlimited use on a single server.

The catalyst for change was Hewlett-Packard Co.'s and Dell Inc.'s agreement to embed XenServer in their x86 servers in recent months, said Frank Artale, a former exec at XenSource and current VP of business development at Citrix.

Our customers were ... saying [per socket] licensing became difficult in mixed environments.
Frank Artale,
VP of business developmentCitrix Systems Inc.

"We wanted to simplify the way we work with [Dell and HP] and our other distributors, and our customers were giving us feedback, saying [per socket] licensing became difficult in mixed environments; upgrading from a small system to a large system with more sockets was difficult," Artale said.

Most server virtualization vendors charge incremental license fees based on the number of CPU sockets on each server, which increases the overall cost of virtualization and complicates things for customers who have to track the number of deployed CPU sockets throughout an entire data center.

When Hyper-V, Microsoft's hypervisor-based virtualization product, hits the market in August, it will cost $28 per physical host but will be priced on a per-processor basis in Windows Server 2008 Data Center Edition. Microsoft is putting out different editions - Standard, Enterprise, and Data Center -- with varying capabilities. The Data Center edition is more scalable than the others, is designed for large-scale virtualization deployments and has hardware partitioning capabilities.

VMware's license pricing model is a per-processor structure, which the company defines as a single physical chip that contains no more than four processor cores.

Virtual Iron Software is priced the same way VMware is, per socket, but at a much lower price. Virtual Iron Chief Marketing Officer Mike Grandinetti said that despite intense pricing pressure over the past couple of months, especially with the release of Microsoft Hyper-V looming, the company's per-socket model works fine for today's systems.

"The vast majority of x86 servers are two-socket servers, especially in the small and midsized market, where we are focused," Grandinetti said. He added that six- and eight-core processors are common and four-socket or more sockets become mainstream for the x86 market, Virtual Iron will revisit pricing. The Lowell, Mass.-based software company charges $799 per socket, compared with more than $2,800 per socket from VMware.

Burton Group analyst and virtualization expert Chris Wolf, who gave a presentation on virtualization software licensing at VMworld Europe in February, said that many attendees had concerns about VMware's licensing policies. Users don't like that the current pricing model is structured with sockets priced in quantities of two and that you cannot split a two-socket license across multiple physical servers, Wolf said.

"So if you have two one-socket servers, you still need two licenses. Also, licensing is by installed instance. So maintaining a separate ESX server at a recovery site would also require additional licensing, regardless of whether the server is running," Wolf said.

The entrance of multicore processors from Intel Corp. and AMD has not been a problem, as all of the major virtualization vendors say they will not count cores, at least for quad-core CPUs. Anything above that could be a different story; no vendor has publicly stated how it will treat eight-core (or higher) CPUs in the future, Wolf said.

The big question is whether Citrix's new pricing model will get a response from VMware. "Without a doubt," Wolf said. "Until this year, they didn't have any real competition, especially in the enterprise. A number of vendors are at the cusp of shipping products with the virtualization technologies that enterprises require, so by the second half of this year, VMware is going to have competition on a number of fronts."

Wolf continued, "I think price reductions [are] a good possibility, but I also expect VMware to work to defend their existing pricing model. The VMware folks feel that even at a higher cost per license, elements of their architecture, such as memory sharing and memory overcommit, can lead to greater consolidation densities per physical host, so the cost per VM may actually be less in a VMware ESX environment than comparable lower-priced platforms."

Citrix XenServer 4.1 features, support
Citrix XenServer 4.1 include the following features:
  • improved scalability and performance to allow more simultaneously running VMs, better nested page table (NPT) support for modern AMD processors, virtual LAN support in Standard Edition, and improved Citrix Presentation Server performance to enable the maximum number of user sessions;
  • reliability and manageability improvements including host network interface card (NIC) bonding for failover, centralized logging, configuration of network management interfaces via the command-line interface (CLI), update/patch management integrated in XenCenter, and Java bindings for XenAPI in Citrix's software development kit, or SDK;
  • the Citrix XenServer host system now includes rolling pool upgrade support, NIC driver updates (e1000, BNX2, TG3) and support for several 10 Gbit network adapters (from Mellanox Technologies and Chelsio Communications Inc.); and
  • guest support now includes Red Hat Enterprise Linux 5 (RHEL 5) 32-bit and 64-bit and CentOS 5 32-bit and 64-bit install from physical CD, Oracle Enterprise Linux 5 x86 and x64 guest support and Windows Vista x86 guest support.

Customers can now download a free 30-day trial of the new Citrix XenServer 4.1. XenServer product pricing starts at $600 per server for an annual license and $900 per server for a perpetual license.

Existing subscriptions will remain the same until they run out, then new pricing will apply.

Citrix Systems has also announced a partnership deal with NetApp to unify server and storage virtualization with the Citrix XenServer Adapter for NetApp Data ONTAP.

NetApp Data ONTAP software processes storage services within the storage array, freeing up physical server resources. The XenServer Adapter for NetApp Data ONTAP makes XenServer 4.1 aware of network storage, and visible to a network administrator.

Let us know what you think about the story; email Bridget Botelho, News Writer.

Also, check out our > Server Virtualization blog.

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