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Virtualization Strategy : Go Open Source

Some technologies cannot be held back but some technologies cannot be milked forever. This article (Which I found on Ashish's blog) has the same thing to say. freeing the VMware Server, Comparison models etc is making virtualization a hard place to make money on virtualization itself. As the writer notes there is loads of money to be made when you start cashing on the "relatively new technology" matra to your own good. Microsoft did this to stop VMware's mad rush to the clients. VMware can further push its prices down and use the same "its a great new technology, we got our own staff to assist you set the things up" to their very own favor.

Why the big change in strategy? In one word: Xen. This is an open source virtualization product emanating from Cambridge University, with a commercial arm called Xensource. The entrance of an open source product into the market has caused the effective price of virtualization to head toward zero. What’s interesting about this market, though, is how fast commoditization has occurred. Unlike databases, where Oracle has a huge installed base that it can milk at traditional prices, virtualization is a nascent market where user choices are being made today. VMWare faced its own choice: maintain its historical pricing and end up a bit player, or chop prices, attempt to establish a dominant market share, and figure out how to make money from the resulting user base. VMWare cut its prices with gusto.

But with XenSource releasing its performance paper, it will give uses a very strong reason to try out Xensource as well. So look at Virtualization as a mad train rushing towards the Commoditization land.

Read the article here.


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