CRN is reporting that next week at VMworld VMware will be announcing that they are doing away with Virtual Memory Entitlements, which you have probably heard me refer to as the Memory Tax.
According to the article (http://www.crn.com/news/cloud/240005840/vmware-kills-vram-licensing-will-focus-on-vsphere-cloud-bundles.htm?cid=nl_alert) VMware is trying to regain its competitive edge over Microsoft’s Hyper-V, which has over the past couple of years soared to nearly 30% market share, making it the fastest growing virtualization platform in the industry.
This is the first time I can remember that VMware is showing any signs that they are trying to compete against the scrappy and powerful competitor. I heard from a source at VMware that they have heard from a great many clients that they are either testing Hyper-V out on a few servers or, in some cases, switching completely. This comes as no surprise in a year when VMware introduced the hated Virtual Memory Requirements, and when Microsoft has made such incredible strides to make Hyper-V 3 as good or better than its larger competitor.
It will come as no surprise to readers of this blog that I was shocked by the Memory Tax, and predicted a year ago it would badly hurt VMware’s market share. In a day and age when competition is getting better, giving their hypervisor away with the operating system, and bundling the management tools with the System Center suite (which the vast majority of companies already own) it simply made no sense for VMware to make virtualization more expensive than they already had.
VMware will be launching vSphere 5.1 at VMworld next week, and the worst of times will be over for their fans. I wonder however if they can turn the ship around… you cannot unring a bell, and the companies who have tried Hyper-V for the first time in the past year have seen what their alternatives are. IT managers have to consider costs, and if the less expensive product is just as good (and is supported by the largest software company in the world) then it will be interesting to see how many of them make the switch over the first twelve months of Hyper-V 3.0 with Server 2012, which RTMed August first and is set to become publically available in early September.
In other News:
Several VMware customers have told me they have received an e-mail that looks like this one:
“… I am your renewals representative from VMware. I wanted to reach out to you regarding a Renewals promotion that we are running through September 30, 2012.
VMware is making an extended effort this year to bring current any expired customers to allow for reinstated SnS and the ability to upgrade to the newest version of vSphere (VS5). Throughout this one-time promotion, we will be offering two separate options with 100% waiver of reinstatement on your expired licenses and up to 100% waiver of your back-dated maintenance; saving you at least 20% on your renewal cost.
By reinstating your support via this promotion, you could save thousands of dollars and regain access to technical support and the most current releases. While supported, you will be eligible for upgrades and updates as well as technical support, both online and via our Customer Support Technicians.
I would be happy to discuss the promotion and answer any questions you may have. Again, this offer is only valid through September 30, 2012; therefore, please let me know if you would like to see pricing options and I will have those generated. If you have further questions about this promotion, please feel free to contact me directly at the information below, or contact RenewalsHotlineAMER@vmware.com
If you are interested in quotes to see how much getting your products back on support would be please let me know and I am happy to get these for you.”
I am not surprised. For the first time in its history VMware will have seen decreased sales in the past year, especially when it comes to renewing SnS contracts. When they launched vSphere 5 (and the hated Memory Tax) they gave existing clients a ridiculously short window to make the commitment to upgrading their licenses… something like 30 days. A great many companies decided to either stick with vSphere 4.1, which meant that they would avoid the Memory Tax, or better yet, begin the process of migrating their existing vSphere servers onto Hyper-V.
It does not surprise me at all that the company is now looking for ways to get that lost business back, even taking the unprecedented steps of lowering the costs AND waiving the penalties. Unfortunately for them, as I wrote earlier in this article, you cannot unring a bell. For the die-hard fans who stayed with vSphere 4.1 this might be enticing, but for companies that dipped their toes into the waters of Hyper-V, and were anxiously awaiting the public release of Hyper-V 3.0, there is no going back.
I have been and will continue to teach those professionals and companies how to best leverage their Microsoft virtualization platform… Welcome aboard!
The World According to Mitch 
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