Virtual Iron Going Physical With Server Bundles

Virtual Iron Software is taking a page from rival VMware's marketing book and making deals to bundle its virtualization software with servers from tier-one server vendors.

Virtual Iron on Tuesday said that its Virtual Iron 4 Extended Enterprise Edition server virtualization software can now be ordered via Tech Data pre-configured on servers from Hewlett Packard and IBM.

This is the first time Virtual Iron has bundled its software with tier-one vendors' servers, said Mike Grandinetti, chief marketing officer for the Lowell, Mass.-based company. However, the software has been OEM'd by Intel for its system builder channel, Grandinetti said. Intel is an investor in Virtual Iron.

Virtual Iron 4 Extended Enterprise Edition is a hypervisor-based server virtualization software that competes with VMware's Virtual Infrastructure 3 suite of applications. It is based on the Xen open source hypervisor, and includes such capabilities as live server migration, load balancing and high availability.

Grandinetti said Virtual Iron's goal is not to displace VMware in customer accounts as much as it is to help solution providers expand their server virtualization practice into smaller customers with a lower-cost alternative to VMware.

"We see the channel looking to supplement the VMware business they have already built," he said. "As they get into SMB accounts, they are looking for alternatives because their customers are looking for alternatives. They are saying, the price and complexity of VMware makes them uncomfortable."

It is a move that Virtual Iron needed to make in order to continue to compete against VMware, said Dave Spears, vice president and general manager at Virtual Technologies, a Denver-based solution provider that works with several server virtualization software vendors.

"When you buy a server from HP, IBM or Dell, you can click a button and get VMware just like that," Spears said. "Virtual Iron needed to do that. It's a business imperative."

Spears said his company is one of a relatively few solution providers in the country to work with VMware, Virtual Iron, and XenSource, which in August was acquired by Citrix. Virtual Iron has been hot in the lower-end small and midsize business market that has been using the free versions of server-based software from VMware and Virtual Iron, Spears said.

"The intent of the free version is to give customers a taste of the software, and it's not intended for production," he said. "But small customers are deploying them. And they are starting to see that if they do that, they are at risk because of the server goes down, they can lose three to four virtual machines."

VMware still has the most features in terms of technology, Spears said. "But in terms of core virtualization, Virtual Iron and VMware both have it," he said.

Bob Keiser, senior sales executive at Saturn Business Systems, a New York-based solution provider that also works with VMware, Virtual Iron and XenSource, said that improvements in Virtual Iron's technology along with the new server bundles has his company making a strategic push with that vendor.

"It's the same functionality at a reduced price," Keiser said. "Strategically it's a more viable solution from a cost perspective for our clients."

Once a customer accepts the need for virtualization but balks at the price, Saturn leads with Virtual Iron, Keiser said. "With these new bundles, we'll have new incentives to lead with Virtual Iron," he said. "Because we are such a long-term partner with VMware, we definitely won't jump ship. But we're leaning toward Virtual Iron from a cost and function view."

Tech Data is putting together IBM server bundles with VMware based on the IBM System x3550 dual-core Xeon-based server, the x3655 AMD Opteron dual-core-based server and the x3500 Intel Xeon quad-core based server, Grandinetti said. With two servers, software, and Virtual Iron gold support, the bundles list starting at about $12,400.

On the HP side, bundles are available based on the HP c3000 blade server chassis, which was introduced just last month, as well as on the HP DL380 Intel-based server and the DL385 AMD-based server. The DL-based bundles, with two servers, list starting at under $10,500, while the blade server bundles list starting at $33,100.

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