VMware To Challenge Microsoft With Free ESXi Downloads

VMware unveiled the plan Tuesday during an update to its third-quarter finances. VMware said revenue for the quarter is expected to be between $462 million and $468 million, compared to analysts forecasts of $497 million.

Next week, VMware plans to start offering free downloads of its ESXi server virtualization technology, said Raghu Raghuram, vice president of products and solutions.

ESXi, formerly known as VMware ESX Server 3i, is the embedded version of VMware ESX. ESXi has all the functionality of ESX Server, but was shrunk to fit in 32 Mbytes of memory instead of the previous 2 Gbytes in order to let it be embedded on server motherboards "We want to make virtualization available to everybody," Raghuram said. "So with advances in hardware and now software, we've eliminated any technology hurdles."

With the move, VMware also helps eliminate cost hurdles, Raghuram said. "We want to make this as ubiquitous as possible and open new opportunities," he said. "Now you get the best hypervisor at the best price in the market. There's no need to use another hypervisor."

Raghuram declined to mention any specific competing vendors or their hypervisors by name, but VMware is seeing its 80-plus percent share of the server virtualization market challenged by none other than Microsoft, which late last week said it has released its Hyper-V technology to manufacturing, the last step before it goes to market.

Hyper-V is slated to be included with Microsoft's Windows Server 2008 operating system at no extra charge, increasing pressure on VMware, whose hypervisor licenses have traditionally cost over $400 each. Other companies, including Citrix with its XenServer technology, are also in the market with low-cost or no-cost hypervisors.

Rolf Strasheim, director of client solutions at Peak UpTime, a Tulsa, Okla.-based solution provider, called VMware's action a brilliant move that will allow it to continue its dominance of the marketplace.

"Why would you buy what you can get free?" Strasheim asked.

VMware solution providers currently find margins for the product to already be low, especially given how much it costs to become certified, and having that free download of ESXi will help.

"It's all professional services for solution providers," he said. "VMware's giving the hypervisor free seeds the market, and helps customers become more educated on the product."

Peak UpTime has not yet experimented with Microsoft's Hyper-V, and would not recommend customers put it in production yet until all the bugs are worked out and more technicians get experience with it, Strasheim said.

VMware's dominance of the market is expected to continue, he said. "People are starting to say, are you going to 'VMware' that server yet?" he said.

Raghuram said that solution providers should benefit from the free downloads because of the need to tie in additional features to make the hypervisor more useful for many companies.

With ESXi, customers can manage multiple virtual servers on a single hardware server. However, in order to tie the virtual servers provisioned on multiple hardware servers, customers will require the VMware Infrastructure Suite.

Despite making ESXi available free of charge, VMware is still continuing to develop its VMware Server product, a free version of its server virtualization technology.

Version 2.0 of VMware Server is currently in beta testing, Raghuram said. "It's for customers who want virtualization that runs on top of Windows or Linux operating systems," he said. "ESXi is for doing server virtualization on bare metal."