It is common practice. Every software company has a flagship product for the enterprise. That is where they make their money. There are only so many Fortune 100, 500, and 1000 companies, right? While it's nice to be able to say that you provide software to 99% of the "fortunate" companies, there are hundreds of thousands (millions?) of small companies around the world. Those small companies will one day become medium and large enterprises.
The key for a software company to gaining customer-base, market share, and adoption of their technology is to "get your foot in the door" early with those small companies and grow with them as they grow. This way, those small companies will grow into that flagship product that you want them to in order for your software company to prosper.
Certainly, VMware was thinking along these lines when they released ESXi. A free version of ESXi now coupled with the free VMware GO to aid in the download and install of ESXi is a smart move.
However, there is something missing - centralized management for the small business. This isn't an enterprise-only feature. This is a necessary feature for any small company that has more than 1 ESXi server. And, VMware, you DO want them to have more than 1 ESXi server, right? If so, why not offer them the centralized management tool that they need?
Today, with the free version of Hyper-V Server 2008 R2 you get features like host clustering and live migration. If you want centralized management of those Hyper-V servers, the ability to migrate storage for running VMs, iSCSI and SAN-based migration across servers, template rapid provisioning, maintenance mode and automatic evacuation from hosts, and live migration host compatibility checks then you need to buy System Center Virtual Machine Manager (SCVMM). It comes in 2 editions - enterprise and workgroup, selling for $869 and $505 respectively. With the workgroup edition, you can manage up to 5 Hyper-V servers.
There is no free or discounted option to manage ESXi. The closest option is to purchase VMware vSphere Essentials for $995 which includes ESX or ESXi licenses for up to 3 servers and allows you to centrally manage them with the included vCenter Server for Essentials. This level of vSphere isn't going to include some of the features you might be expecting out of vSphere including feature like VMotion, SVMotion, HA. However, even vSphere Essentials includes Update Manager - something Microsoft doesn't even offer.
While you are missing the features mentioned above with ESXi, you are getting memory ballooning and over commitment which will allow you to place many more virtual machines on a single server than you can with Hyper-V. This will allow you to increase your ROI and decrease TCO because you won't need as many servers. It will also vastly improve your consolidation ratio.
Some bloggers on the Internet have called for VMware to give vCenter away for free. That is certainly one option but it may be hard to go from charging $4995 for vCenter Standard to "absolutely free".
Instead, here is a much more palatable pill for VMware to swallow - release vCenter Express.
Press Release: VMware Releases vCenter Express
Here is my proposed press release that describes what vCenter Express will offer you:
VMware Introduces vCenter Express - a free edition of VMware's centralized management server that will make managing free ESXi servers fast and easy
Ideal for the small and medium businesses - VMware vCenter Express provides centralized administration for up to 3 ESXi Servers and provides powerful centralized management to the SMB
(January 20, 2010) - VMware, Inc - Released today, VMware vCenter Express, offers you centralized management of up to 3 free ESXi servers. With vCenter Express you can quickly provision new virtual machines, monitor the performance of the virtual infrastructure, and configure the VI from a single console. It includes a search engine and database server as well as the vSphere client and Web Access.
Additionally, VMware's new backup and recovery application - VMware Data Recovery - will now be included with vCenter Express, as Data Recover Express. With Data Recovery Express, virtualization admins at the SMB level will no longer have to worry about how they will backup their new virtual infrastructure. Data Recovery has a feature-rich GUI as well as data de-duplication, image-level backups, and file-level restore but be limited to backing up just 3 ESXi free servers and 50 virtual machines.
Since I believe that virtualization backup is a big concern for SMB customers, I figured that VMware might as well throw in Data Recovery with vCenter Express as virtualization backup is also a critical need, not just for enterprises, but also for SMBs around the world.
What about features like VMotion, SVMotion, and VMHA? For now, I think that VMware should still charge for those features but, eventually, they will have to consider offering those at no charge either. However, this shouldn't be a problem for VMware as they continue to come out with more and more higher-end features and products that large enterprises WILL pay for and keep the coffers at VMware filled with the income that the shareholders demand.
What would this do to vSphere Essentials and Essentials Plus? Honestly, I think that those packages should just be removed.
How does this help VMware to compete with Microsoft?
By creating the new vCenter Express that is coupled with the free edition of ESXi, VMware has a much better value proposition over Microsoft. Here is why:
- ESXi offers memory overcommitment and memory ballooning, providing much higher consolidation rations that what Hyper-V can offer. ESXi also offers Update Manager - a very valuable tool.
- vCenter Express is free where SCVMM workgroup is still $505
- As virtualization backup is a big hurdle for a SMB who wants to move to virtualization, VMware solves that problem with the free Data Recovery Express. Microsoft offers no solution for virtualization backup.
While this "express" package from VMware is still lacking a few features that Hyper-V has (such as live migration and host clustering), you will get a better consolidation ratio, virtualization backup, and update manager without having to pay a cent.
VMware would be smart to provide a completely free centralized management option to SMBs. Microsoft already has "their foot in the door with SMBs" as every SMB has Windows Server and Office. VMware needs to make a stronger value proposition to give them the opportunity to prove that they are the best virtualization platform by offering vCenter Express