VMware for the common man: Virtual Iron offers enterprise-class virtualization suite for less

Hoping to tap into discontent with VMware Inc.’s pricing, Virtual Iron has recast its virtualization offering as a direct competitor, complete with a suite of management tools for enterprise deployments. I spoke with president John Thibaut this afternoon about the offering (see the press release) and whether the tiny upstart can win going head-to-head against the market leader while armed only with a mix of aggressive pricing and competitive features.

When I first came across Virtual Iron in 2005, the company was focused on server aggregation – the ability to create virtual machines that span multiple processors and multiple machines. “We decided not to support that any longer,” says Thibaut. The evolution of multi-core processors made the technology less vital, so in the Fall of 2005 the company dropped the idea entirely and refocused. “The need in the market for server aggregation has become obsolete. The quad-core announcement Intel made recently all but put the nail in the coffin for that kind of capability,” he says, adding that in 12-18 months he expects to see offerings that put eight cores into a single socket.

Server aggregation technology also had another drawback. To get adequate performance and reduce latencies, it required an InfiniBand fabric to connect together the physical machines used by a single virtual machine instance. That could cost upwards of $20,000 per node, the company says.

Virtual Iron 3.0, which supports Suse and Red Hat Linux, was released in October. Version 3.1, which debuted today, adds Windows XP and 2003 support and can allocate up to 96GB of memory per virtual machine. It also bundles a suite of Virtual Infrastructure Management tools, including a LiveMigration program for moving running virtual machines between physical servers; a LiveCapacity tool for dynamically reallocating resources to virtual machines based on demand; LiveRecovery automated failover software and LiveMaintenance software that facilitates bringing physical machines offline without disturbing virtual machines running on them.

Virtual Iron hopes to gain attention by competing aggressively on price. At $499 per socket, Virtual Iron comes in at 20% of the cost of a comparable VMware product, Thibaut claims. Indeed, high prices of VMware’s virtualization tools do appear to be a concern with some IT professionals, especially those in small and mid-sized companies.

It’s not the top one, however. In a Computerworld reader survey of organizations that have not deployed virtualization, cost came in as reason number four. The top three reasons for not moving to virtualization included lack of skills on staff, a lack of perceived benefits and worries that consolidating physical servers into virtual machines running on one physical machine would create a single point of failure. (See the feature, The Virtual Procrastinators)

If Virtual Iron’s technology proves itself in the field, the price differential - if it holds - is large enough to give the startup an opening – and IT a price break. By pricing by the socket, the effective cost for Virtual Iron, expressed per virtual server, is also likely to drop as users move from single cores to dual, quad, then eight-core processors per socket.

Virtual Iron also hopes to gain attention by giving its product away for free – sort of. Taking a cue from Microsoft and VMware, Virtual Iron can be downloaded and licensed at no charge when run on a single physical server with up to four sockets. Unlike Virtual Server and VMware Server, which must run on top of a host operating system, the free version of Virtual Iron includes a hypervisor that runs directly on top of the server hardware, which should make it perform better. Virtual Iron built its product on top of the open source Xen hypervisor.

Will IT organizations bite? The very small size of Virtual Iron might make its long-term viability a concern. With about 75 employees and about a dozen customers, the company is quite small. On the other hand, Thibaut points out that it has some big-name backers that include Intel, SAP and Goldman Sachs. It has also rolled out two customer references: The Charlotte Observer and Mobius.

The pricing differential with VMware is big enough that IT organizations are likely to take a look at Virtual Iron, while the free download just might entice IT organizations to play with the product. Ultimately, however, no one goes up against competitors like Microsoft and VMware by competing on price alone.

Today Virtual Iron, VMWare and others are building empires on top of their own hypervisors. Tomorrow as the hypervisor layer rolls into the operating system, virtualization vendors will be selling management tools that sit on top of industry standard hypervisors that come with Red Hat or Longhorn – and competing with offerings from established server management tool vendors that are aggressively moving into this space. Virtual Iron hopes it has a leg up by building virtualization management tools in the same class as those offered by VMware but on top of a “commodity,” open source hypervisor.

Will Virtual Iron's strategy work? Who knows. But IT stands to win when more choices and lower prices are in the offing. Commoditization of the hypervisor in Windows won't occur until 2008. In the mean time, Virtual Iron could offer a way for smaller companies with tight budgets to get into the enterprise server virtualization game without losing their shirts. It's worth a look.

Copyright © 2006 IDG Communications, Inc.

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