VMWare will be moving towards a consumption based pricing model.

VMware CEO Maritz: Get Ready For Consumption-Based Pricing

“We are going to have to move towards more of a consumption-based model. This is where we are going,” Maritz said at the event Thursday, as reported by Computerworld UK. “We are trying to keep the licensing stable for as long as we can, but in 10 years from now, things will have changed quite radically.”

Maritz isn’t known as a spinmeister, but the frankness of his comments caught the attention of several VMware partners. Consumption-based pricing is a percolating issue in the IT industry, and one that will likely fuel future friction between vendors and their customers and partners.

Consensus opinion among the partners CRN spoke with is that the vSphere 5 vRAM controversy has caused Maritz to re-evaluate the way he sets expectations for customers.

“He’s never been that forthright and direct about this issue,” said Keith Norbie, vice president and CTO at Nexus Information Systems, a Minnetonka, Minn.-based partner. “However, anyone who thinks the industry isn’t going to this kind of model is kidding themselves.”

I think most astute watchers have seen this coming. It will be interesting to see the upcoming battle between Hyper-V3 and vSphere. Microsoft is close to giving Hyper-V away (uh no anti-trust issues there :rolleys: ) Still given improvements that Hyper-V is promising, the impact on the SMB space will be pretty large. I can’t quite think that VMWare would be willing to give up that part of the market, especially since its still lucrative.

That said, I guess we will have to wait to see what the future holds when/if this change takes place. I for one was not too happy with the initial licensing changes in vSphere5, at least until the Ent+ memory entitlement was doubled to a more respectable level. One has to wonder about the impact on many of the third party companies that are dependant on VMWare for their livelyhood and how changes to the licesning structure will affect their bottom lines as well. I could envision a seachange in licesning since so many companies are tied to that per-socket scheme.

Microsoft will remain the wildcard in all of this. If they continue with their current Hyper-V licensing scheme, it could conceivably eat into a very large chunk of the SMB market, and Hyper-V 3 is supposed to be far more mature than its predecessors. Still, I think for the Enterprise, VMWare will be the de-facto standard for the time to come.

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