Oracle and VMware fight over the Virtual Iron customers – UPDATED

Posted by Staff   |   Wednesday, July 8th, 2009   |  

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In May Oracle announced the acquisition of Virtual Iron. Just five weeks later the database giant fired most of the employees, terminated the partner program and stopped selling new licenses (with a few exceptions).
The only option offered to Virtual Iron customers is to drop their suddenly-in-end-of-live hypervisor and jump on Oracle VM, which is free but certainly has different capabilities and not a single tool to simplify the migration.

Virtual Iron never detailed how many customers they have, but it’s safe to assume that most of them, if not all, are in the SMB segment. And considering that Virtual Iron had a $3.4 million revenue in 2008, it’s likely that its customers are no more than 3000 as The Register is suggesting (more probably much less than that).

For some reasons these customers must be special if VMware decided to announce a notable 40% discount to those ones that will move to vSphere.
The initiative sounds good but uncommon for VMware, which never took too much care of the SMB market in its history.

Oracle anyway is not too happy about this intromission and immediately answers:

Oracle is dedicated to the on-going support of Virtual Iron customers and has enhanced the support offering beyond what was previously available from Virtual Iron. Oracle is pleased to be able to offer its Lifetime Support program for Virtual Iron products, which will extend sustaining support for these products and the Virtual Iron Enterprise Edition products indefinitely.

At least the VMware disturb activity helped to understand why Oracle fired all the Virtual Iron employees but 10:

Oracle has retained Virtual Iron support personnel, so that people who provided support prior to the acquisition will continue to do so going forward.

So the Virtual Iron customers have to choice between a free virtualization platform (Oracle VM) that is about to drastically change (nobody knows how and when) and an expensive (but discounted) virtualization platform (VMware vSphere) that probably the already evaluated and rejected before adopting what they have today.
It’s safe to assume that they are looking instead at Citrix and its free XenServer.

Update: After a number of days in silence also Microsoft enters the discussion, and easy to guess its primary purpose is to smash the VMware offering:

…But a closer look at the VMware offer shows some serious limitations.  These include:

  • Only Virtual Iron 4.0 or newer customers are eligible
  • Only those with active support subscriptions with Virtual Iron are eligible
  • Customers must buy a VMware license for every socket on their Virtual Iron contract.  This effectively locks in the customer to VMware for size of their Virtual Iron contract.
  • The discount is 40% off the list price of the product but only 10% on one-year of support and subscription, 0% for more than one year of support subscription.
  • The offer isn’t valid on all SKUs.  This means for Virtual Iron customers who want to keep their Live Migration and CPU balancing capability, they need to buy vSphere Enterprise Plus, the most expensive SKU.

As usual VMware is welcome to rectify if the analysis above is not accurate. This post will be further updated to include they perspective as well.

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