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VMware sets its hypervisor free

The virtualisation vendor has made its embedded hypervisor product free following second quarter results that missed analysts’ expectations.

VMware has topped a turbulent second fiscal quarter by announcing that its embedded hypervisor product ESXi will be available free of charge.

The virtualisation vendor's recently appointed chief executive Paul Maritz said during an analyst call to discuss its second quarter results that customers will be able to download VMware's core hypervisor from its website.

Customers will also be to buy products featuring it through existing VMware original equipment manufacturer (OEM) partners, including Dell, HP, Fujitsu Siemens and IBM, as the vendor will also be making the hypervisor free to use in their servers.

The official launch for the free ESXi was due next Monday. But Maritz could likely have decided an otherwise cloudy growth outlook as indicated by the fact VMware's reported revenue that slightly missed analyst expectations for its 2008 second quarter, lowering its full-year revenue forecast, could do with some positive news.

In his first public statement as chief executive since former and founding chief Diane Greene was ousted, Maritz played up the free release of the hypervisor in the face of increased market competition in the shape of Microsoft and its own recently launched hypervisor, called Hyper-V.

A former Microsoft executive himself, Maritz said Microsoft was a "formidable" but "not invincible" competitor, especially given VMware's lead in the virtualisation market.

Martin Neimer, VMware senior product marketing manager told IT PRO the hypervisor release was not a knee-jerk reaction to competition from Microsoft, but had in fact been planned for some time.

"The announcement is designed for those smaller organisations and those enterprises not yet using VMware to experiment with bare-metal virtualisation," he said.

"It will allow us to build value from the rest of the VMware portfolio when they look to greater adoption, while our channel and partners will be able to add value too on top of the core product."

VMware added that it expects revenue for 2008 to grow 42 per cent to 45 per cent from last year - up to as seven per cent less than the company's original forecast.

Roy Illsley, senior Butler Group analyst, told IT PRO that although releasing VMware ESXi freely was probably not a sudden decision, it would certainly help stave off slowing growth and consolidate its position in an expanding market thanks to Microsoft.

"This will help increase their penetration and footprint," he said. "It's not the first time they've done something like this and can be seen from the perspective that no company is ever able to sustain double digit growth indefinitely."

"Most people were shocked with Diane Greene going," he added. "So I'd be interested to see if Maritz can bring his insight into Microsoft to bear or whether EMC starts exerting more of an influence."

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