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Microsoft to VMware at VMworld: Game On!

After VMware customers cry foul about cost changes, Microsoft makes its licensing model pitch--just in time for VMworld 2011.

For anyone laboring under the illusion that Microsoft was just sitting idly by as VMware customers worked to figure the effects of vSphere 5's new pricing model, that myth has now officially exploded. As VMware pitches itself at the VMworld 2011 confab this week as a cloud services leader, Microsoft is on the ground with internal and external product and marketing teams, scurrying to make sure that VMware customers know they have an alternative to vSphere 5. Microsoft's message: "We can do private cloud too, and our version will cost you a heck of a lot less and be easier to license than VMware's version."

At the center of Microsoft's effort is a Microsoft whitepaper that shows a simpler licensing model for the pieces and parts of Microsoft's offering required to create a private cloud infrastructure, as compared to VMware's. With the whitepaper, Microsoft is making three points. First, that what it thinks customers really want is to go beyond virtualization alone, to creating their own private clouds. Second, that its products are significantly cheaper to license than are VMware's. And, third, that Microsoft's products are easier to license and use than VMware's.

The whitepaper itself is vintage Microsoft, with regular references to System Center 2012 capabilities--even though that product is at least six months away. Microsoft describes itself as "all about the app" in the whitepaper, but for certain key features such as service definition and monitoring, refers to the future version of System Center.

What's harder to dismiss is the pricing analysis. Under Microsoft's Enterprise Cloud Infrastructure license, all products are bundled together and sold on a per processor license. VMware pricing tends to run the gamut from per VM pricing for certain systems such as vShield and vCloud director, to per instance pricing for vCenter, and of course per processor and vRAM pricing for vSphere itself. When all the pieces are in place, Mircosoft's analysis shows VMware pricing to be from four to ten times as costly as Microsoft's ECI licensing.

While it's clear from reading the analysis that VMware users could bring their costs down by selectively deploying some of VMware's products, it's hard to argue with the notion that IT planners are better off deploying what they need for solid technical reasons rather than worrying about the mounting cost of VMware's ala carte approach. The other question will be whether users actually want every aspect of the private cloud offerings from both vendors. Not every organization wants to create a self-service, chargeback environment built on multi-tenancy ideas.

In the end, users will be faced with a choice. Even with the promised new features of System Center 2012, VMware will remain the feature leader. However unless VMware makes significant concessions and does some better bundling, Microsoft's products will be cheaper and easier to use at least from a licensing perspective. That's a discussion that Microsoft is eager to have.

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Art Wittmann is director of InformationWeek Analytics, a portfolio of decision-support tools and analyst reports. You can write to him at

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