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There are some clear parallels between VMware's Project Zephyr and Microsoft's Business Productivity Online Services suite, which is now part of Office 365.
Microsoft's unveiling of BPOS at its 2008 partner conference elicited howls of protest from partners, particularly because it ushered in a commission and recurring revenue model that at the time was new to most of Microsoft's channel.
Over time, Microsoft's partners have embraced BPOS, but some smaller, niche focused partners couldn't make the adjustment to the new model. And, Microsoft's aggressive pricing for BPOS and Office 365 has eroded traditional margins while also opening the door for services-oriented partners to move higher in the stack.
One VMware vCloud service provider, who requested anonymity, is concerned that VMware will follow in Microsoft's footsteps in its pricing for Project Zephyr.
"Microsoft made BPOS dirt cheap, and I fear that VMware will also low-ball its pricing," said the source.