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VMware Shifts Pricing Strategy

During the VMworld 2010 conference this week in San Francisco, virtualization software vendor VMware will implement a new pricing structure for its vCenter Server management suite that will be based on the number of virtual machines running on a virtualized server, not on the number of processors on the server. This shift in pricing policy, taking effect Sept. 1, is intended to better align the price of the software license to the value of virtualization technology to a customer. However, the change may cause disruption for some VMware customers who may have to pay more for VMware than they're used to.

The switch in pricing applies only to VMware vCenter, the company explained in a July 13 news release, which includes eight different management software products: vCenter Application Discovery Manager, AppSpeed,  Lab Manager, Capacity IQ, Configuration Manager, Site Recovery Manager, vCenter Chargeback and Lifecycle Manager.

The change in pricing is needed because, while virtualization has become the answer to "server sprawl" in data centers, the popularity of virtualization has created a totally new problem of "virtual machine sprawl," said David Floyer, chief technology officer and co-founder of, a Web site where industry analysts, vendors and customers share information about tech industry issues.

"Doesn't the world change quickly?" Floyer observed. "Virtualization is a victim of its own success."

With virtualization software charged per processor, he said, customers started buying servers with the highest-performing processors available and began loading those host machines with as many virtual machines (VMs) as they could. Individual departments within a company could create VMs without having to budget for the cost of new hardware and without receiving a chargeback from their IT department. Without having to justify the expense of a new server instance, VM sprawl resulted.

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