Virtualization Technology News and Information
OMG! Is Dell Really Going to Give Away VMware ESX Server 3i for Free?

Holy absorption rate Batman, can this be true?  Is Dell really planning on giving away VMware ESX Server 3i for free?  Are they going to absorb the cost?

The virtualization community has been "discussing" VMware's pricing for its hypervisor technology for some time now.  Once virtualization platforms started reaching the rock bottom price of "free" (VMware Server, Microsoft Virtual Server, Xen, etc), and then after Microsoft added to that by announcing that Hyper-V would be rolled into Microsoft Windows Server 2008, the discussion of VMware's ESX Server's pricing continued to get fueled. 

Now the latest in this pricing battle, it sounds as though one hardware vendor is prepared to offer VMware ESX Server 3i for free when consumers purchase one of Dell's servers.  According to a recent article at The Inquirer:

"IT APPEARS as if Dell will not be charging a premium for the inclusion of VMware’s ESX3i hypervisor with its PowerEdge servers.

Martin Niemer, senior product marketing manager at Vmware, said that Dell has said it won’t charge for inclusion of the 32MB integrated hypervisor on its server range."

Of course, this begs the question.  If this is indeed the case, what happens with the other vendors who proudly came on stage at VMworld Europe in France to talk about their hardware and ESX Server 3i?  Won't these vendors have to follow suit?  HP, IBM and Fujitsu are all offering servers and/or blades with the hypervisor technology in them.  They certainly can't afford to charge for something that Dell is giving away, can they?  And if they can't, who can?  Does that mean that 3i will become a free hypervisor technology? 

And then forget about the hardware vendors.  What does that do to all of the VARs and smaller resellers who are trying to make money from selling VMware's technology?

Published Friday, March 14, 2008 10:24 PM by David Marshall
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jefmes - March 15, 2008 12:30 AM

I really don't see the significance of this. Even if it is embedded for free in a flash chip of some sort, all it gives VMWare is that extra bit on an "in" since they can say, "Hey, we're already right there, go ahead, use it!"

The problem is that sentence is followed by, "...and you only need to buy the $5995 license to integrate it into your enterprise environment!" Now, I happen to drink the VMWare kool-aid and think the value you get out of a nice ESX box is worth that money, but not all companies are in a position to put that kind of money out there.

The cost of putting 3i on a bunch of 32MB USB flash fobs is insignificant to the total price of the server.

GaryB - March 15, 2008 9:35 AM

Pretty amusing. This may not be that significant as jefmes said though. But it is definitely yet another move down the road to commodity.

It doesnt take away the $6k licenses like jefmes said, but the cost is significant for Dell and those that follow Dell's lead when you start talking about a $500 list price item being given away with tens or hundreds of thousands of servers. It all adds up.

And not everyone is going to go for the $6k license but will take the free esx that it gets. The winner in this is VMWare without a doubt. They could care less if Dell pays or enduser pays. And if you ever bought a Dell server before you know the price markup and how much wiggle room Dell has on their server pricing and you know Dell is going to make money off the server with free or pay 3i.

The other main vendors will have to follow Dells lead. Smaller resellers wont be able to sell 3i. And once the hardware vendor gives you 3i, you will more than likely purchase other VMWare goods with them to.

Of course isn't all this still speculative anyway? Even though it sounds 100 % plausible.

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