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VMware tweaks pricing, bundles with vSphere 4 launch

VMware tries to lure new customers to vSphere 4 with a greater diversity of bundles and some introductory upgrade packages.

With the launch of vSphere 4, VMware took the opportunity to adjust pricing and packaging, introducing two new editions and prices that target all users, from high-end enterprises and service providers to small businesses just getting their feet wet with virtualization.

For more on VMware vSphere:
VMware launches vSphere 4

A guide to VMware vSphere 4

VSphere 4 also introduces another, more pedestrian, change: VMware will abandon its practice of listing price per dual processor and instead will list price per single processor. That's partly because vSphere supports single-processor systems, and also because it's cleaner and easier for customers to understand, said Bogomil Balkansky, VMware's vice president of product marketing for the server business unit. And VMware will no longer offer à la carte pricing for individual features.

Small-business bundles
At the low end, VMware has done away with the old Foundation Edition, replacing it with vSphere Essentials and Essentials Plus.

As a whole, the new bundles make sense to longtime VMware observers.

The Essentials bundle targets small-office environments with a vSphere hypervisor and management agent license for up to three dual-processor servers for $995, or $166 per processor. For $2,995 (or $499 per processor), Essentials Plus adds VMware High Availability (HA) and VMware Data Protection for backup.

The Essentials bundles compare favorably to the old Foundation Edition, which cost $995 for a single dual-processor system ($498 per processor). The Essentials Plus edition, meanwhile, costs the same per processor as the Foundation edition but also includes VMware HA and replaces the complex VMware Consolidated Backup (or VCB) with the small business-focused Data Protection product.

Data center SKUs
Moving into larger data center environments, vSphere 4 comes in four editions that build on one another: vSphere Standard, Advanced, Enterprise and Enterprise Plus.

The standard SKU lists for $795 per processor, and includes the ESX or ESXi hypervisor, a management agent, thin provisioning, and VMware HA.

At $2,245 per processor, vSphere Advanced adds live migration (VMotion), Fault Tolerance, vShield Zones and Data Protection. By way of comparison, in Virtual Infrastructure 3 (VI3), VMotion was included only in the top-of-the-line Enterprise Edition that listed for $5750 per dual processor, or $2,875 per single processor.

The new vSphere Enterprise edition, meanwhile, adds Distributed Resource Scheduling (or DRS) and the now full supported Distributed Power Management (or DPM), plus Storage VMotion. Pricing for Enterprise Edition remains unchanged at $2,875 per processor but now includes thin provisioning, Data Protection, Fault Tolerance and vShield Zones.

Finally, vSphere's crown jewels -- the distributed virtual switch and host profiles functionality -- are offered in the new Enterprise Plus edition, which lists at $3,495.

VI3 to vSphere upgrade path
Existing VMware Infrastructure 3 (VI3) customers on service and support contracts can upgrade to the corresponding edition of vSphere 4 for free. Specifically, VI3 Foundation and Standard customers will receive the new vSphere Standard, and VI3 Enterprise shops can upgrade to vSphere 4 Enterprise.

At the same time, VMware offers introductory pricing for VI3 customers that want to upgrade to the next bundle up. VI3 customers that want to upgrade from VI3 Standard to vSphere 4 Advanced can do so for $745 per processor, adding VMotion, Fault Tolerance, vShield Zones and Data Protection backup. VI3 Enterprise shops can purchase vSphere Enterprise Plus for $295 per processor, getting support host profiles and distributed virtual switch capabilities.

As an additional incentive to upgrade, VMware has increased the number of physical cores per processor supported by the new Advanced and Enterprise Plus editions. Previously, VI3 supported up to six physical cores per processor. Going forward, vSphere Advanced and Enterprise Plus will support up to 12 cores per processor.

Customers, analysts react
That leaves some obvious questions: Will existing customers choose to upgrade and, more broadly, do VMware's new bundles adequately satisfy the needs of its broad customer base?

Given the state of the economy, it's possible that most customers will hold off on upgrading from VI3 Enterprise to vSphere Enterprise Plus.

"I'd like to [upgrade to Enterprise Plus], but it really depends on where our budget sits," said Ryan Makamson, systems engineer at Washington State University School of Electrical Engineering and Computer Science. As a smaller shop with six ESX hosts, the distributed virtual switch functionality would be a nice-to-have, not a need-to-have, feature. Sure, having to set up a virtual switch on each host "is kind of annoying," he said, "but after a while, you become kind of proficient at it and find ways to script and automate stuff."

The larger the VMware environment, though, the more likely they will adopt Enterprise Plus, said VMware's Balkansky. "The distributed virtual switch and host profiles are most useful to large organizations, so that's where we've targeted them," he said.

Taken as a whole, the new bundles make sense to Chris Wolf, an analyst at the Burton Group.

"My first impression was that [VMware] did a pretty good job there," Wolf said. "They needed something they could economically bring to the small-to-medium space," referring to the Essentials bundles, and he thinks they have succeeded. And while host profiles and distributed virtual switch functionality represent an additional charge, Wolf believes their higher price tag is justified. "There are tangible TCO [total cost of ownership] savings attached to them; they make ESX deployments faster and help productivity," he said.

And the users Wolf talks to aren't complaining either. When it comes to vSphere 4 pricing, "our customers haven't blinked an eye."

Let us know what you think about the story; email: Alex Barrett, News Director. And check out our Server Virtualization blog

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