VMware to raise prices in Europe, Australia and New Zealand by 10% starting Sep. 2

The storm that is currently investing VMware, started with the sack of its CEO Diane Greene, may be not finished yet.

virtualization.info has just learned that VMware is about to increase the price of all its products and support subscriptions in Europe by 10% starting Sep 2, 2008.

On July 7, just one day before the Greene’s removal was formally announced, VMware communicated the news to its distributors through an online webcast.
Subsequently, the distributors announced the upcoming price increase to the whole sales channel with dedicated emails.

The last term to buy any VMware product at the current price is September 1st.

The official motivation for this notable change is the high currency volatility in Europe.
Anyway it’s worth to note that VMware always required its worldwide distributors to pay all prices in US Dollars.

One of the biggest critics that VMware always received is about the high prices, often unaffordable for SMBs. And this is why cheaper alternatives like the ones offered by Virtual Iron and now by Microsoft get remarkable attention despite a not comparable feature-set.
This move may further push the European customers towards these competitors.

The early feedbacks that virtualization.info collected so far about this move are not positive (also because the partners price discount didn’t change accordingly).

The question is if the price increase is really dictated by the high currency volatility in Europe or if it is an attempt to alleviate the bad financial performance that VMware is suffering right now.

What’s sure is that the European sales channel will have a hard time explaining the departure of VMware CEO and the price increase to all those customers that are already courted by Microsoft.

Update: virtualization.info has just learned that the 10% price increase is confirmed also in Australia and New Zealand.
At the moment we can’t confirm when the new prices will be applied.

It seems that the high currency volatility is not just a European problem.

Second update: VMware is not the only one increasing its prices. Oracle did the same one month ago (15-18% increase) and Forrester predicts that even more companies will follow shortly.