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Free ESX3i – What made VMware do it?

Mike Laverick analyzes why VMware has chosen to release ESX3i for free.

Well, I thought I’d put my industry analyst hat on and try to do some quick thinking about why VMware has made the decision they have. I also think that, like with the departure of Dianne Greene a couple of weeks ago, a whole new load of FUD will be generated. You know the internet/blogs are becoming an FUD Machine in their own right!

A. the decision has nothing to do with the departure of Dianne Greene; in fact, it was probably her who was instrumental in ratifying the decision.

B. this has nothing to do with trying to recover VMware’s share price, it’s much too big of a decision to make based on the flippance of the stock-market.

C. Is VMware running scared of Microsoft? Well, I wouldn’t use the term "running scared", but quite clearly, making the hypervisor free kind of puts the spanners in the works for Microsoft HyperV. Not only is ESX better, it's now free. 

D. This is a stab at the SMB market. Yes, it is, but I doubt VirtualCenter will be free, and without a legitimate management tool, the new offering will be little limited. There’s no solid information on VMware's position. VirtualCenter for management only isn’t too expensive, and VMware will try to upsell the SMB to advanced features by using the free hypervisor as a foot-in-the-door strategy. Additionally, there are some ESX managers that are “free”, such as HP VMM and IBM VMM.

E. What if I have already bought ESX3i at full price? The rumor is that there will be a rebate for those customers.

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