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Time for VMWare to Change Its Pricing Model

The once darling of the software industry, VMWare, is currently struggling to recover to anything close to what it was

The once darling of the software industry, VMWare, is currently struggling to recover to anything close to what it was. With stock once riding high at $124 per share, it is now struggling to break the $40 barrier.

VMWare rode the initial wave of the virtualization revolution, producing high quality software to allow you to run and maintain multiple operating systems on one host. They were largely uncompeted for a number of years, but now that the computing world has decided that virtualization is indeed here to stay and will shape our landscape, a number of competitors have appeared, including solutions from Microsoft.

I am a proud VMWare customer having purchased their excellent Workstation product. In this world of open source, it was the only software purchase I made in 2007, and I do not regret it in the slightest. It is a solid piece of software and infinitely better than just their free VMPlayer.

But you see that's part of the problem. Having now acquired my excellent software, I have no desire or requirement to upgrade. This version is doing everything I need it to do. No more money coming from me for the foreaseeable future.

Part of the problem of VMWare is that they are struggling to close the big enterprise deals, with companies taking longer to decide, with many opting for smaller and short term contracts.

The virtualization world has not only changed how we think about server infastructure, but also how we think about billing. Gone are the huge initial outlays for expensive kit and network that we will probably never need, well not at first.

Virtual hosting companies, like Amazon and Flexiscale, all charge with a usage model. This "per-CPU hour" works very well in a virtualization world, where you can quickly ramp up to multiple running instances.

Continued ...

More Stories By Alan Williamson

Alan Williamson is widely recognized as an early expert on Cloud Computing, he is Co-Founder of aw2.0 Ltd, a software company specializing in deploying software solutions within Cloud networks. Alan is a Sun Java Champion and creator of OpenBlueDragon (an open source Java CFML runtime engine). With many books, articles and speaking engagements under his belt, Alan likes to talk passionately about what can be done TODAY and not get caught up in the marketing hype of TOMORROW. Follow his blog, http://alan.blog-city.com/ or e-mail him at cloud(at)alanwilliamson.org.

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