Blogger Kieth Ward's recent blog - "Feedback: Dead Wrong on VMware Pricing" (http://virtualizationreview.com/blogs/weblog.aspx?blog=2712) debates whether VMware pricing is too high. The interesting thing about the blog is that Jason Boche, a VMware customer disagrees.

Keith said the following:

"Ask 100 VMware customers what their greatest complaints about the company are, and 99 of them are likely to list price at the top. VMware recently took a step in the right direction when it made ESXi free, but there's more to do. It's still the most expensive solution out there -- by a mile."

One important point that I don't think that Keith emphasized enough: ESXi is just a free hypervisor with limited use cases. If you want to do anything of substance with VMware you still need Virtual Center and VI3 - which is still the same high price as it ever was. See my blog - Free ESXi is Pie in the Sky for more detail.

But Jason Boche - an end user customer happily using VMware disagrees with Kieth. He thinks that asking VMware to lower its price will impact their ability to innovate and I quote:

"I challenge those to propose a model on how a company like VMware can continue producing their market leading innovation without collecting revenue on products."

I think the major point that is overlooked in Jason's position is that not everyone can afford VMware's pricing. Not everyone can afford a BMW or a Mercedes. That is why Honda and Toyota are so successful. However, the problem is that VMware is selling at BMW prices to customers who really can only afford a Honda. And that negatively impacts everything else that they do.

I contend that if VMware isn't challenged on every level including pricing - that dynamic will kill innovation and not foster it.

That is why it is important to have competition. That is why Virtual Iron (and others) play a vital role in the market.

Virtual Iron has focused on ease of use - however - by its very nature virtual infrastructure is complex because it integrates with a sophisticated ecosystem that includes physical servers, LANs, storage networks and backup solutions.

It is important for product vendors to extend their knowledge and experience and share it with the outside world. This provides value that complements their products with practical and immediate impact to the customers.

Virtual Iron has a suite of online training vignettes and courses that addresses the core considerations implementing our solution from pre-installation planning, integrating with storage networks, VLAN configurations, high availability, etc. Additionally, the bulk of the training is free.

The results have been significant - Virtual Iron customers are avoiding issues and accelerating implementation. And we get far fewer support calls. Again, we have an easy to use product - however - since it touches so many other things in the data center having the insight and knowledge at your fingertips is invaluable to the entire process.

Allow us to pound our chest a little bit on this - we have great training - and it has proven to be extremely valuable. Yes - the product is important - but we have enhanced the Virtual Iron "experience" by complementing our solution with accessible and useful online training.

There is a great deal of discussion at VMworld around cloud computing and a key ingredient is virtualization - which is a little like saying that cheese is important to Lasagna (sorry but my Italian comes out every now and then when I use food analogies).

First it is important to define what cloud computing is and who is going to use it. In my mind the broad definition of cloud computing is any data center that is highly virtualized and offers services to users near and far. And that my friends makes nearly every company in the world a candidate. This is an important point - since the requirements and characteristics of cloud computing must be considered for a broad audience. Since the cloud is not 100% physically tangible it better be uber-manageable. That is where the VIrtual Iron VI-Center comes in.

The more accepted definition of cloud computing is service providers that host data center infrastructure offering compute, network and storage services to external customers. People often jump to the conclusion that these service providers are big monster companies that have billions in assets. Tom Bittman, a senior analyst for Gartner pointed out in a conversation with me that he believes that there will be mid-tier cloud computing service providers that will play a vital role and have a major impact on the market.

I agree with Tom's analysis as evidenced by Virtual Iron's own customer base that includes a number of service providers offering cloud computing solutions - some for well over a year now. And like the rest of Virtual Iron's customers they get a bigger bang for their buck because they get true server virtualization that fits within the boundaries of their budget. This is critically important to service providers and their business models. It is all about scale and keeping infrastructure costs down - which is true of every operating environment - however since their revenue is based on this premise - it is their business do or die.

Cloud computing isn't a new concept by any means. However, virtualization takes it to another level. Virtual Iron is already there supporting the mid-tier cloud guys with a solution that makes much more sense at an economical level than any other competitive product- no ifs, ands or buts. For the larger guys - the same fundamentals apply - as well as greater flexibility with the willingness and ability to build true partnerships.