VMware Slashes Price On GSX Entry-Level Server


On Thursday, the Palo Alto, Calif., company announced a new price point of $1,400 for a two-CPU license of GSX Server, and $2,800 for an unlimited license that supports systems with up to 32 processors.

The two-CPU license formerly cost $2,500. Meanwhile, the unlimited license, at $2,800, replaces the $5,000 four-CPU license and $10,000 eight-CPU license previously offered by VMware.

GSX, which supports both Windows and Linux as a host operating system, is an entry-level version aimed at server consolidation, disaster recovery and application migration and testing.

Observers speculated that VMware would cut prices on its software after Microsoft entered the market with Virtual Server 2005 in September. VMware, however, is not lowering the price on its full-featured flagship product, ESX Server, which is designed for enterprise use.

Sponsored post

VMware opted to lower the price on its entry-level server in order to allow companies to test out the server consolidation benefits of virtualization software for first-time users, said Michael Mullany, VMware vice president of marketing. "We want to make it as affordable as possible so companies can dip their toes into virtualization."

He said the decision to slash the price on GSX was motivated by a successful price cut on its workstation product during the first quarter, but he acknowledged that new competition from Microsoft was another factor.

"The effect of the price decrease is to make the total actual cost lower than Microsoft Virtual Server," Mullany said.

Microsoft Virtual Server 2005, Standard Edition, is priced at $499 for a four-CPU license; the Enterprise Edition, supporting an unlimited license of up to 32 processors, costs $999.

One VMware partner who is selling "tons" of ESX server and not as much GSX said the price cut on the low-end version will help VMware stave off competition from Microsoft and entice new users.

"It should drive more sales and help them keep their sales ramp going," said Glen Holmes, director of sales and business development for Integration Technologies, Irvine, Calif. "There's no competition to ESX, so VMware drops the price point on GSX to make it more attractive so they don't lose any deals [to Microsoft] and get some exposure in new companies where they can upsell ESX."