Virtual Iron

Startup attempts to counter VMware's 300-pound gorilla with a pricing cudgel

January 6, 2007

4 Min Read
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Server virtualization vendor Virtual Iron is using the latest version of its software to take a swing at market leader VMware.

While Virtual Iron has lagged in features, compared with VMware, the startup is playing catchup with this release and clearly hopes to make up for lost distance with pricing.

"When you talk to customers and analysts, the number one obstacle to broad-based virtualization is cost," says John Thibault, Virtual Iron's CEO, explaining his decision to introduce a new pricing model for his firm's product.

Virtual Iron Version 3.1 is priced at $1,000 for two server nodes with volume management and resource scheduling, compared to $3,000 for the previous version of the software. (See Virtual Iron Revises Platform.) Pricing for a comparable configuration of VMware's Infrastructure package, including the ESX Server hypervisor, volume management, and resource scheduling, starts at $5,750 for a two-way server.

Today's announcement also brings Virtual Iron's pricing closer to that of XenSource's XenEnterprise product, which starts at $750 for a two-way server license. (See XenSource, Xen & the Art of Virtualization, and Building Virtual Empires.)Other enhancements in Virtual Iron 3.1 include support for Intel's quad-core Xeon processor 3000 series and support for AMD's hardware-assisted virtualization -- both features that already are included in VMware's and XenSource's products.

Virtual Iron has also extended its support for 32- and 64-bit Linux to Windows with 3.1, matching the combination already offered by VMware. "Windows represents about 80 percent of the market opportunity for virtualization vendors," explains Thibault.

Being late with functionality comparable to VMware's has driven Virtual Iron to aim squarely at its rival's well publicized Achilles heel. VMware users have already voiced their concern about the vendor's pricing structure, citing spiraling costs as they add backup features, for example, to their infrastructures. (See Users Talk Virtual Tension, Virtual Cultures, and Tales From the Virtual Crypt.)

At least one user has been won over by Virtual Iron's strategy. Geoff Shorter, IT infrastructure manager at the Charlotte Observer newspaper, says that in his opinion, VMware is pricing itself out of the market. "VMware is the 300-pound gorilla leading the market, but at some point they have got to respond to this," he says.

The Charlotte Observer spent around $3,000 on a VMware ESX Server license in 2005. Cost considerations, though, prompted Shorter to roll out Virtual Iron 3.1 on two servers supporting the newspaper's circulation application. "You're looking at around $1,000 for Virtual Iron [running on two nodes] versus $5,750 for a full-featured version of VMware," he says.Shorter is now planning to standardize on Virtual Iron across the Charlotte Observer's 120 servers. "Our goal is to move everything over to Virtual Iron to save costs. We have a three-year plan to virtualize every server we have, and that starts in January."

Despite the cost benefits, though, Shorter admits that Virtual Iron is still playing catchup in one area: Unlike VMware, Virtual Iron does not yet offer a virtual switch within its software, which enables a virtual machine to choose a hardware network interface card (NIC).

This feature can be useful when setting up virtual servers, according to the exec, although he has bypassed this problem thanks to a "cloning feature" within Virtual Iron which lets him clone copies of his operating system. "They have told us that [the virtual switch] is one of their top priorities for the first quarter of next year."

At this point, Virtual Iron has around a dozen paying customers for version 3.1 of its software, according to Thibault, although only two of these, the Charlotte Observer and Rye, New York-based archiving firm Mobius Management Systems, have been made public.

Whether today's announcement prompts any price movement from VMware remains to be seen. The vendor was unavailable for comment when Byte and Switch contacted them with regard to this story, although recent comments from the firm suggest that no changes are planned for the near future.Price, though, is not the only thing users are worried about when it comes to virtualization, according to Gordon Haff, principal IT advisor at analyst firm Illuminata. "Cost is always a factor, but it has to do with promise [as well]," he says. "VMware is an established product with an established ecosystem, but Virtual Iron is less of a known commodity."

Virtual Iron 3.1 is generally available today.

James Rogers, Senior Editor, Byte and Switch

  • Illuminata Inc.

  • Virtual Iron Software Inc.

  • VMware Inc. (NYSE: VMW)

  • XenSource Inc.

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