VMware Pricing Controversy: Users Say Microsoft Door Open - InformationWeek
05:56 PM
Art Wittmann
Art Wittmann
Connect Directly

VMware Pricing Controversy: Users Say Microsoft Door Open

InformationWeek surveyed IT pros about VMware's recent licensing policy change and their virtualization plans. They had plenty to say about VMware--and Microsoft.

For Microsoft and its aspirations for Hyper-V and associated virtualization technologies, it was Christmas in July. The highly anticipated launch of VMware's vSphere 5 on July 12 came with a rare present--a new licensing policy that VMware customers almost universally despised. The maelstrom probably came as no surprise to VMware's top brass; from the way they dealt with announcing the new pricing model, they knew they were treading into dangerous waters.

For the bulk of its vSphere 5 launch presentation, VMware put on the sort of announcement that only a few vendors can pull off these days. Think of the likes of Oracle, Intel, and Microsoft. From the beginning of the presentation until just before the very end, one after another of VMware's top managers took the stage to describe new capabilities that would keep the vSphere product well ahead of the competition with advanced features that solve real problems in clever and useful ways. Anyone watching the first three quarters of the show would have been convinced that VMware had spun a product that would keep and build upon its server virtualization near-monopoly. (Most industry estimates put VMware's enterprise market share near 80%.)

Then at the 42-minute mark, at about the time Steve Jobs might have said "oh, and one more thing", out came VMware's top marketer Rick Jackson to mention his "just one more thing": a new licensing model that would be part of the new product and that would answer customer concerns for version 4.1's licensing. In the four minutes spent on what he called vRAM-based pricing and licensing, he was light on details but big on reassuring promises.

He talked about the complex world of licensing as an inhibitor for customers wishing to take advantage of new advanced hardware. He talked about removing the physical constraints of licensing and introducing the idea of pooled vRAM as a way to set customers free to use all the capabilities of VMware without bounds, regardless of hardware advances. He said that VMware believed its new model, which it had developed in response to customer desires, was simpler and would accelerate adoption.

What he failed to mention was that for many customers, licensing costs would increase--quite substantially for some, and would keep on increasing as users adopted new technology that progressed in capability and capacity as Moore's Law dictates. With dual socket systems dominating the current installed base, systems configured with 256 GB of RAM would need more than five licenses rather than the two licenses currently required.

VMware Pricing Controversy: Exclusive User Research
Slideshow: VMware Pricing Controversy: Exclusive User Research
(click image for larger view and for slideshow)
As users figured out what the policy meant to them, the blogosphere and VMware's own forums lit up with the sort of ire that only comes when intensely loyal customers feel they've been betrayed by their favorite vendor. The sting was made worse by a very strong quarterly report from VMware. The vSphere 5 cash grab was at best tone deaf to the budget situations of most of its customers, and to many, seemed just downright greedy.

The cry was so shrill that InformationWeek's research team set out to determine just how VMware users felt about the change. Was the hue and cry only from a vocal fringe of power users, or was it a more universal reaction? The response was striking. Only 7% of our respondents said the new licensing policy was "good" or "great," while 61% found it to be a deterrent to adoption.

We gave the VMware news a few weeks to settle in before fielding our survey. While we wanted to get user's feelings on licensing, we also wanted to understand how they viewed the other technical advancements in vSphere 5 and how they planned to evolve their server infrastructure over the next few years. As with all InformationWeek research studies, we gave respondents a chance to offer freeform comments at the end of the survey. These can often be as telling as the survey itself.

Seventy eight of the 410 respondents to our survey left comments--that's more than typically do, and is a good sign that the nerve is still raw. Though we didn't ask for comments on licensing specifically, all but four of the 78 touched on it, and of those 74, all but four questioned or criticized VMware's new policy. The level of vitriol varied greatly.

Most comments were fairly matter-of-fact about their issues with new licensing system. One IT manager from a mid-sized company in the medical industry put it this way "VMWare is great, but as it is, very expensive. With this new licensing arrangement and shrinking IT budgets, we're looking at other options." Others showed more emotion, like this IS architect from large financial institution: "I didn't like the last licensing change, and I like this one even less. We are now evaluating Hyper-V as a replacement for VMware." And some minced no words in their assessment of the policy, like this systems analyst from a government agency: "The new licensing is in direct conflict with VMware design philosophy. Over provisioning [of memory] was the big selling point, now it's costing you a fortune. Stupid decision."

1 of 2
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll