VMware, in a fit of generosity, has announced it is slashing prices for SMB customers purchasing 3 licenses of VMware ESX. I thought a quick head-to-head comparison with XenEnterprise v4 might help to convince you what a steal this deal really is, and remind you to keep your hands on your wallet.

First, the deal offers 3 ESX licenses with Virtual Center thrown in for free. But the Virtual Center version they offer is limited so that it can only connect to 3 ESX servers. And the ESX servers are just ESX servers recycled from their VI3 Starter package, already priced at $1000 per host today, and with a severely hobbled feature set.

Of course, when you want to buy your 4th ESX Starter server it will cost you $6,000. That’s $5,000 for a full version of Virtual Center plus another $1,000 for an additional ESX Starter license. And here’s what that ESX starter license won’t offer you:

- No SMP support for VMs (1 CPU per VM)
- Limited to using 8GB of host memory
- Limited to 4 sockets per host
- No resource pooling, VMFS cluster file system, VMotion or other fancy features

By Comparison, if you wanted only 4 VMs per server, then XenExpress is completely free and has built in management. But for a true head to head comparison compare their offering with XenServer, our product that offers 8-way SMP support for Linux and Windows, no per-socket limits, certification with up to 128GB memory, up to 32GB memory per guest and up to 32 physical CPUs, and with built in management of multiple servers via XenCenter, for $3240 including support.

Here are the bundle details:

- A single sku for 3 VI3 Starter licenses for $3k.
- Includes a limited VCMS, allowing for management of 3 licenses.
- Does not include S&S (21% of license cost) = $630.
- Support needs to be purchased for all 3 licenses. = $1,890.

No upgrade: VMware has said no upgrade skus will be made available at launch. Channel partners I’ve been talking to really dislike that. Instead, if the customer wants to upgrade to VI3 Enterprise they need to upgrade all 3 licenses rather than upgrading piecemeal. This would also require a full featured upgrade of Virtual Center at full price.

In addition, to upgrade a customer from GSX you need to use their Converter to convert the VMs to the ESX 3 virtual hardware – at an additional charge. Other drawbacks of this package include the following: No VMotion, No SMP, No Drs, etc; No SAN support – it requires local storage to be used. (This appears to be viewed as a drawback from the channel partners who want to sell the profitable shared storage solutions).

Overall, rather underwhelming.