VMware Gets All Free & Easy

VMware finally bowed to the the inevitable this week, turning its ESXi hypervisor into freeware.

Now facing stiff competition from Citrix/XenSource and Microsoft, which recently launched its Hyper-V hypervisor, VMware abruptly dropped its $495 ESXi licensing fee in what could be the shape of things to come.

With Citrix touting the open-source Xen hypervisor and Microsoft charging just $28 for its Hyper-V Server, VMware's move highlights the increasingly aggressive nature of the virtualization market.

"This has been a long time coming -- they knew that there would come a time when they couldnt charge for the hypervisor," says Chris Wolf, senior analyst at the Burton Group. "VMware had to ask themselves, 'Do we want to lose out in enterprises where price is a factor?' "

The analyst nonetheless feels that this was hardly a "knee-jerk reaction" from the virtualization giant, explaining that the bulk of the company’s revenues come from its myriad software bundles.”It’s a good move for them,” he said. “It’s not really hurting them too much revenue-wise -- most people are paying for their Virtual Infrastructure tiers of products anyway.”

VMware, unsurprisingly, played down the suggestion that this was a defensive move when the vendor spoke to Byte and Switch earlier today.

“This is really a continuation of a long-term strategy for us of trying to make virtualization available everywhere,” said John Gilmartin, the vendor’s senior product marketing manager. “In 2006 we had a product that we called GSX Server, that we turned into a free product called ESX Server.”

The exec added that this week’s ESXi announcement, which was first discussed on the vendor’s Q2 earnings call last week, is designed to get new virtualization users up and running.

”It’s really part of that strategy of trying to make virtualization pervasive and ubiquitous,” says Gilmartin, but he concedes that the vendor is playing in a “competitive” market. “We’re going to always pay close attention to our customers and market conditions.”VMware, of course, can easily cope with this show of largesse, particularly given that the vendor has more than 20 (revenue-generating) products that sit on top of ESXi.

It has already been suggested that VMware’s next move should be to add more features to the free ESXi or drop the pricing for the likes of Virtual Infrastructure, although Gilmartin would not offer up any hostages to fortune when he spoke to us today.

”We will be vigilant [to customer needs and market conditions],” he said, coyly. “But right now we feel confident that the pricing that we have for our Virtual Infrastructure suite provides tremendous value for our customers and provides the types of solution that are not available from anybody else today.”

VMware, which almost single-handedly created the virtualization market as we know it, has hardly been synonymous with free software, although clearly the times are-a-changing. With smaller organizations now looking to exploit virtualization, and an increasingly cut-throat market, we should see much more movement on price from the major vendors over the coming years.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.