As predicted
by Forrester
, New
CEO Paul Maritz
announced this week that VMware will drop the price of ESXi (their base server
hypervisor) to $0 (from $495).
This obviously comes in response to Microsoft Hyper-V
pricing ($28 per server) and as competition to the free open source Xen

Support is not included with the free ESXi; if you want that
it starts at $495/server
per year

An individual ESXi installation can
be managed through a simple interface but if you want to manage multiple ESXi
servers at once, you need to upgrade to VMware Infrastructure Foundation,
Standard or Enterprise Edition, which start at $995 per 2 socket server. Upgrading is required
to manage multiple servers as VirtualCenter Agent is required for any
management software, such as Cassatt Active Response, DynamicOps VRM or even VMware’s own VirtualCenter
(add another $2,040
for VC Foundation Suite
to talk to ESXi.

So this doesn’t really address the typical enterprise’s cost
of VMware deployment – just the marketing threat of the low Hyper-V starting

VMware has used this pricing strategy several times to help
seed the market, grow its customer base and fend off competitors. VMware Player
and GSX server were both made free to respond to the threat of open source and
other competitors. Both Player and GSX served as nice onramps to try VMware but
had performance penalties and limitations, so customers quickly upgraded when
they were through experimenting – stopped a lot of customers from experimenting
with the open source stuff. The same is likely to be true here; while free ESXi
certainly isn’t crippled (it’s the same code as in the commercial versions) the
fact that you can’t manage more than one at a time is the driving drawback.

While the $0 price will encourage experimenting, enterprises
with Microsoft Windows ELAs can experiment with Hyper-V for free, too. Both
solutions start to rise in price once you get serious but the acquisition
costs for commercial Hyper-V will be lower
for these customers than buying
VMware. But if you want a more mature solution and the live migration and HA
capabilities VMware brings to the table, the cost differential is worth it.

By James Staten

Check out James’ research