Storage and networking are two more areas ripe for virtualization, said Dave Bartoletti, a senior analyst at Taneja Group. "The advantages are there, but people just don't know about them. You can get the same efficiencies with storage that people have in servers."
Burton Group's Jones said that the falling prices will also have an impact on the low end of the market. "For non-critical workloads for which many customers could not justify the high price of VMware, they can now do that. Especially when they buy a single processor $700 Dell tower server for low-end work, they can now get closer to justifying virtualizing from a price point."
To gain purchase in smaller IT shops, VMware on Tuesday also unveiled what Raghuram called "Always-on IT for the SMB." That's the $166 per processor offering and it's designed to enable small offices to virtualize and manage up to three physical servers, which would cost a total of $995.
"SMBs that think virtualization is only for big companies should think again," Raghuram added. "We're bringing them a tailored solution that meets their top three needs -- availability, management, and security -- at a price they can afford."
Read more about virtualization in InfoWorld's Virtualization Channel.