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Can Red Hat’s low-price bundles lure new cloud and virtualization customers?

As Microsoft and VMware battle for supremacy in cloud management and virtualization, Red Hat offers new pricing deals. But price has never been the problem for Red Hat's software.

BOSTON – Red Hat unveiled lower-cost cloud management and virtualization software to better compete with Microsoft and VMware, yet IT pros said it will take more than a cheaper deal to sell them on Red Hat.

The company revealed its plan to bundle CloudForms, OpenShift and Enterprise Virtualization products as well as lower prices here, during the Red Hat Summit this week.

But Red Hat’s lower prices can only buy so much market share when features are lacking, IT pros said. Red Hat Enterprise Virtualization (RHEV) 3.0, recently released with Red Hat Enterprise Linux (RHEL) 6.3, offers live migration and scalability on a par with VMware Inc.’s vSphere 5, but it doesn’t offer many of the features offered by VMware at the Enterprise licensing level yet.

 “As [Red Hat] keeps growing, if they keep the prices sane, great,” said Michael Hoyt, a contractor with Life Cycle Engineering based in Charleston, S.C.

However, RHEV is “just not comparable” to VMware, which Hoyt works with most of the time.

“Give them a couple of years,” he said of Red Hat.

Red Hat's new bundles

The company announced four bundles that target cloud computing and virtualization, along with per-VM pricing for each:

  • The Red Hat Hybrid Infrastructure-as-a-Service Solution includes RHEV, Red Hat CloudForms, and RHEL guest operating system licenses for $1,149 per guest, with a minimum 10-pack purchase. Future versions of this bundle will also include public cloud hours for $1,299 per guest, also with a 10-pack minimum purchase.
  • Red Hat Cloud with Virtualization Bundle includes RHEV and CloudForms for $500 per guest with a minimum 10-pack purchase.
  • OpenShift Enterprise Platform-as-a-Service (PaaS) Solution includes CloudForms, RHEV, RHEL and JBoss middleware for building an on-premise PaaS, priced at $4,000 per VM with a 10-pack minimum purchase.
  • In addition, the company also announced Red Hat Storage, a hybrid-cloud storage offering for unstructured data. It’s available with Red Hat Storage Server 2.0.

Some features RHEV users await include storage live migration; the ability to allow a virtual machine (VM) to use disks from multiple storage domains or pools; the ability to designate different networks for management, storage and VM traffic; UI support for Cisco Unified Computing System; and the ability to hot plug and unplug NICs, among other features -- all of which are due out in RHEV 3.1. That version is expected within the next year, but a timetable has not been formally disclosed.

For now, Red Hat hopes to attract new customers with low pricing. The newly announced bundles come as competition and pricing wars heat up between VMware and Microsoft in cloud management and virtualization. While $40,000 for PaaS is seen as a high price point for Red Hat, the Cloud and Virtualization Bundle undercuts both of its main cloud and virtualization competitors by a significant margin.  Red Hat will offer a $5,000 entry point for 10 VMs’ worth of cloud and virtualization management.

By comparison, Microsoft charges $3,607 per host processor for System Center. VMware pricing is $2,875 per processor for its Enterprise license, the minimum required for use with vCloud Director, and $3,750 for a 25-pack of vCloud Director licenses, plus support. Customers also pay up to $700 per guest for RHEV.

CloudForms limitations: Windows

CloudForms, in its 1.0 incarnation, formally supports only the creation of new guests with RHEL operating systems. Though, in practice, users can deploy other Linux variants and import existing Windows images.

A graphical user interface and chargeback will also have to wait for future releases.

“Not supporting new Windows images – that’s a showstopper for me,” said Don Hall, senior systems administrator for a large media company, who sized up CloudForms as a potentially more cost-effective replacement for VMware’s Lab Manager than vCloud Director.

Other Summit attendees will hold out for a promised Red Hat distribution of OpenStack for cloud management, which is currently in customer trials but not out as a supported product.

“We need to see that technology working. It’s been only a roadmap item for a while,” said Julian Velez, a director of application services for UNE EPM Telecomunicaciones S.A., based in Colombia.

Velez said he and his colleagues were interested in getting in on Red Hat OpenStack development, in the hopes of speeding that process along.

Red Hat differentiates between OpenStack and CloudForms in that OpenStack provides a ‘clean sheet of paper’ approach to data center cloud management, while CloudForms can slot in over existing infrastructure.

Beth Pariseau is a senior news writer for and Write to her at or follow @PariseauTT on Twitter.

Next Steps

Red Hat gives Windows the boot with RHEV 3.0

RHEV 3.1 to bring storage live migration, scalability

Red Hat Enterprise Virtualization: Overview of RHEV-M, RHEV-H and RHEL

Dig Deeper on Virtualization vendor comparisons

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After this announcement, will you consider a RHEV deployment?
Why. It's not a mature product yet.
feature lacking will be ok on some server situations were somw downtime is accepatble for the cost saving. some customers will not tolerate any outages not even 15 mins. so redhart will not work for this
We will deploy 2013