Virtualization vendors target smaller businesses

VMware introduces a low-cost virtualization service plan

As large enterprises embrace the concept of virtualization to more efficiently manage their information technology systems, vendors are now targeting the small-to-medium size market.

VMware on Monday is introducing a new low-cost service plan to give small-to-medium businesses (SMB) a taste of what virtualization can do for them. It's entry level bundle includes a free download of the VMware Server software for virtualizing servers and a $1,500 support plan called Virtual Center.

Although less than the $5,000 support program for enterprise customers, the $1,500 support plan is limited to three two-socket physical servers that could be converted into multiple virtual servers. If an SMB customer wants to virtualize more servers, the support would cost an extra $400 for each extra server.

Virtualization refers to the practice of managing a data center holistically to make the best use of the hardware available, reduce the capital cost of new servers and the operational cost of electricity to run them. Virtualization software like VMware Server makes it possible for one server to run multiple software applications at the same time.

VMware sees growth potential in the SMB market, given that 70 percent of 1.2 million downloads of the free VMware Server software since June 2006 have been to SMB customers, said Ben Matheson, director of product management for VMware, a subsidiary of storage vendor EMC. He defines small-to-medium businesses as those with fewer than 1,000 employees or an average of 100 physical servers in their businesses.

"There is a lot of market awareness of the value of virtualization in the enterprise...but we think it's useful for all companies," said Matheson.

He anticipates many of the SMBs downloading the free VMware Server are just taking virtualization out for a test drive. "There are definitely a lot of trials, getting it into their labs and using things like virtual appliances and testing them. But there is also quite a bit of production use," he said.

Server vendors have also been making overtures to the SMB market.

Hewlett-Packard began offering a Virtualization Assessment Service on Feb. 1 to analyze an IT infrastructure to see how it might benefit from virtualization. The service is being offered through HP's resellers who typically serve its SMB customers, while HP's own sales and engineering force tends to large enterprise customers.

IBM even calls its initiative a "Virtualization Test Drive." IBM launched in 2006 a virtualization education and sales initiative targeted at SMBs. IBM said that more than 65 percent of their virtualization sales are driven by IBM partners targeting SMBs.

This story was corrected on February 6, 2007

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