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VMware Debuts Cheaper NSX Software-Defined Networking Options, Hikes Pricing For Premium Version

VMware debuts new lower-cost options for NSX in a bid to spark sales among small and medium-size customers, while also raising its pricing for its Enterprise version.

VMware on Tuesday introduced two new less-expensive versions of its NSX software-defined networking product with reduced functionality, while also raising the price of its full-featured version.
At a list price of $5,996 per CPU socket, NSX has primarily been a technology for . With its new entry-level and intermediate versions of NSX, VMware shifting its software-defined networking sales efforts to small and medium-sized organizations for the first time since launching NSX in 2013.
VMware is now selling a Standard version list priced at $1,995 per CPU socket, and an Advanced version priced at $4,495 per CPU socket, a VMware spokesman told CRN.
With the new versions, VMware is hoping to boost sales of NSX and counteract the ongoing decline in its core vSphere server virtualization business.
At the same time, VMware is raising the list price of its fully functional version of NSX, now called Enterprise, to $6,995 per CPU socket, said the VMware spokesman. This version lets customers use NSX across different data centers, and also includes IPSec and SSL virtual private networks, remote gateway and multisite NSX optimizations, VMware on its website.
Customers that want to use NSX's network security features, which VMware calls "microsegmentation," will have to shell out for the Advanced or Enterprise versions. The Standard version doesn't include distributed firewalling, integration with Microsoft Active Directory or automation of security policies with VMware's vRealize cloud management software.
All three NSX versions are available on a perpetual license, while the Advanced version also includes a per-user pricing option so it can be used with virtual desktops, VMware said in the FAQ.
The new licensing options will be a welcome addition for customers that don't need all of the features of the Enterprise version, said Jason Nash, consulting architect at Ahead, a Chicago-based VMware partner.
Nash expects the Advanced version to be more popular than Standard version because it includes distributed firewalling, which he described as a "must-have" security feature in NSX.
"I'm not sure how much [NSX] Standard they'll sell, but the new pricing does make [NSX] Advanced a lot more reasonable for customers that really just want distributed firewalling and a few other things," Nash said.
The new NSX licensing model went into effect Tuesday, and the VMware spokesman said customers working with partners on active deals will get the old pricing until the end of the vendor's fiscal second quarter on June 30.

Current NSX customers with active VMware support contracts will get the functionality of the Enterprise version, VMware said in the FAQ.
By introducing a set of tiered NSX offerings with different functionality and price points, Palo Alto, Calif.-based VMware is following the playbook of Microsoft and other enterprise software vendors, while also signaling that NSX is mature enough to gain mainstream market traction.
VMware said earlier this month that NSX now has more than 1,400 customers, with about 350 using the technology in production networks. NSX was on an annualized run rate of $600 million going into 2016, but VMware hasn't updated that figure since then.
VMware partner bookings of NSX grew 100 percent year over year in the vendor's latest quarter, Dom Delfino, vice president of worldwide sales and systems engineering for VMware's networking and security business unit, said in a blog post Tuesday.
Some customers are deploying NSX alongside Cisco's competing SDN technology, called Application Centric Infrastructure, said Delfino in the blog post.
Meanwhile, VMware's vSphere server virtualization cash cow continues to decline, with compute license bookings falling 10 percent year over year in its latest quarter, and total compute bookings dropping 1 percent.
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