Home VMware: Drops Prices by Half for Small Business Market

VMware: Drops Prices by Half for Small Business Market

VMware is changing the pricing model to a more pay as you go basis and is cutting by half the cost of its low-end offerings for the small business market.

The pricing changes are a reminder of how competitive it is getting as virtualization technologies become a means for deploying private clouds.

Microsoft this week announced it own initiative to launch private cloud environments at its Worldwide Parters conference. Microsoft is in alliance with Citrix, a competitor to VMware. For hardware, Microsoft has formed alliances with Dell, Hewlett-Packard and Fujitsu.

VMware has another approach. Its strategy is to help data centers run, secure and manage applications in the private cloud or have them bridged on-demand to partner-hosted public clouds.

It is apparent that VMware is trying to increase the pressure on Microsoft while also responding to criticism about its higher prices.

Under the new pricing for VMware vCenter products, customers will now be charged for which virtual machines that get powered. So, for example, if a client has purchased 10,000 virtual machines in the previous 12 months then it will only pays for the virtual machines it powers up. The pricing is effective September 1.

The model borrows from cloud computing services. It’s clear the intention is to provide more attractive ways to get customers to scale its use of virtualization services but on a pay as you go basis. Customers have been asking for this change as they commit more deeply to virtualization.

This in turn provides insight into VMWare’s plan to reduce by half the cost of its software for the small business market. VMware is seeing some of its most significant growth with small businesses. VSphere Essentials is VMware’s most affordable virtualization platform. It will now cost $495 for six CPUs, or $83 per processor. That is down from nearly $1,000 for six CPUs.

VMware is also announcing it is tripling the power of its virtual management environment, providing the capability to for its VMware vCenter Server to maintain up to 15,000 virtual machines.

The new upgrade is designed to increase the scalability of the platform to support cloud computing service providers.

VMware’s news goes into far deeper detail on issues such as its memory compression technology enhancements and faster migration capabilities.

But the most interesting news is the contrast to Microsoft.

VMware is using its position in the market to create disruptions in pricing models. In turn, its incremental improvements provide the company with the capability to offer easier scaling capabilities with more flexible pricing, helping small businesses most of all.

VMware is a sponsor of the ReadWriteCloud channel

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