Dell, VMware Ink Deal

The bundle, which uses VMware's ESX virtualization software and Virtual Center management platform, not only provides load balancing of applications within a server, but also across all servers, said Subo Guha, director of software product marketing in Dell's Product Group.

"This aligns with our strategy to help customers grow their server utilization by moving more applications to four-way and two-way servers for the best total cost of ownership," Guha said.

That strategy has been gradually expanding as Dell adds scaled-out technologies, including clusters for high-performance computing and technologies like InfiniBand for grid computing, Guha said.

Steve Bishop, vice president of technology at VeriStor Systems, an Atlanta-based solution provider, said the bundling of VMware software and Dell four-way servers is a good idea. "If you take a [four-way server], virtualize in some utility servers or a disaster-recovery box, you can do it," he said.

The expanded partnership between VMware and Dell may not thrill all parts of the channel, but it wasn't unexpected. EMC,a close ally of Dell,acquired VMware late last year.

"This is going to really scare the VMware VARs," said one partner. Others, however, maintain that the bundled offering will grow the virtualization market and enable VMware partners to expand their customer bases.

One VMware partner who also works with IBM said that although the EMC-Dell relationship could pose a long-term threat, EMC is currently helping his business grow. "I was upset IBM didn't purchase VMware, but EMC is bringing VMware more leads," he said.

For its part, VMware hopes to assuage partners' fears. "We understand partners' concerns [about EMC], but we want to assure them that's not the case," said Michael Mullany, VMware's vice president of marketing. "The VMware direct-sales team continues to act as a separate sales force and work with our value-add resellers as they always have. EMC reps cannot sell VMware."

One ISV said partners are better off with VMware as part of EMC as Microsoft readies its Virtual Server 2004, poised to hit the market this summer. "Remember Lotus 1-2-3 and the market share they had?" the ISV said, when asked about VMware's downplaying Microsoft's entry into the market.