Is VMware pricing itself out of the market?

UK customers say VMware's ESX server is no longer cost effective when compared to alternative virtualisation offerings from Microsoft and Citrix, writes Martin Courtney

Leave it: The Woodland Trust has decommissioned its VMware servers

UK organisations are ditching VMware in favour of lower-cost server virtualisation tools from Microsoft, Citrix and others, complaining that VMware licensing and support is expensive and the software is difficult to maintain by comparison.

Kingston University has been using VMware ESX server as its primary server virtualisation platform for years, and recently started using Microsoft Windows Server 2008 with Hyper-V to support a specific deployment of virtual desktops.

But Kingston technical analyst Dan Bolton believes that now is the time to start considering a full-scale migration to Hyper-V and ditching VMware altogether.

“The increasing costs of VMware and various server virtualisation elements mean we are evaluating Hyper-V as an alternative, and realistically next summer could be the time to migrate,” he said. “Prices have gone up steadily over the past few years, and what was a very good public sector discount has started to vanish. Unlike Microsoft and other competitors, VMware does not offer campus deals.”

UK conservation charity the Woodland Trust also ran VMware server virtualisation software for the past 10 years, but decommissioned its last couple of VMware ESX servers in September. It says the lower costs were important, and has gone from using seven physical servers running VMware to three blade servers supporting remote desktop services, and another three for Hyper-V sessions.

“There is no free lunch, but costs in a charity are more aggressive. We were having problems with our mature estate and re-evaluated what the market had to offer,” said Lionel Wilson, head of IT at the Woodland Trust.

“Installing Microsoft Systems Center Virtual Machine Manager (MSCVM) was an additional cost but Hyper-V comes free with Windows 2008 Server. The biggest benefit was that we could put Exchange on it, and also something we thought was taboo – remote desktop services. That has allowed us to replace Citrix as well.”

Accurate cost comparisons between Windows Server 2008 with Hyper-V and VMware ESX server (now vSphere) are notoriously difficult to make. Different methods of charging and additional fees related to operating system, application and virtual machine management software licensing tend to obfuscate matters further, especially for organisations virtualising Microsoft software specifically.

“VMware does not seem to have a fixed strategy around how it wants to charge,” said Bolton. “If it does it by VM [rather than by server], that could hit us quite hard as we have some servers running 50 VMs and others just one or two. Microsoft has a very simple cost structure.”

Analysts agree that additional features included in vSphere and other VMware products tend to make VMware server virtualisation tools more expensive, which tends to deter smaller organisations unlikely to use advanced functions.

“VMware has well-engineered solutions but they are also the most expensive, and price is more of an issue for smaller businesses,” said Ovum’s Roy Illsley.

“Though it will not say it, I think VMware has accepted that it will not be able to tackle Microsoft and Citrix yet on price, so it is trying to get in with the service providers ahead of the cloud battle, taking a platform-as-a-service approach, and working on interoperability with V-Fabric.”

Microsoft says the acquisition costs of buying its Hyper-V server virtualisation platform can be as little as one sixth that of an equivalent solution from VMware, a price that makes most sense for organisations running up to 50 virtual servers.

“People do not need to sign up for technology which is six times more expensive and costs more to run,” said Microsoft UK virtualisation manager Lucas Searle.

“We have other customers, such as retailer Paul Smith, that are running Microsoft Exchange and Office Communicator as virtual apps and have switched to Hyper-V for cost reasons.”

“A sixth [of the cost of equivalent VMware software] sounds a slight exaggeration – it is more likely to be half the cost – but these things are always arbitrary,” added Illsley. “VMware will argue it can get more VMs per host to get the costs down, for example, so how do you judge?”

Although it could offer no UK customers in support of its argument, VMware senior product marketing manager Douglas Philips said the two server virtualisation platforms are equal from a cost perspective, precisely because ESX Server/vSphere is more likely to cut the physical server footprint in half compared to Hyper-V by running more VMs, providing greater savings on hardware and power.

“That obviously has a cost significance. VMware typically comes out on a par with Microsoft but with more features and functions,” he said.