Microsoft turns the tables on VMware’s cost calculator

Since its initial product launch in 2000, VMware has been the company to beat in server virtualization technology when it comes to features, stability, security, and market share. Microsoft’s initial attempts with Virtual Server and Virtual PC got the company into the race, but it was a major stretch to compare these products to what VMware was offering at the time. With an inferior product, Microsoft had to grab hold of whatever it could in order to lay claim or take away market share from VMware. In this case, the Redmond giant’s best offensive weapon was and has been to offer its solution at a cheaper price.

With the introduction of Microsoft Windows Server 2012 and Hyper-V 3.0, Microsoft is finally on its way to becoming a more feature-rich and stable hypervisor platform, and the company can hold its own in a more apples-to-apples feature comparison with VMware ESX. But even with an improved platform, Microsoft seems intent on hammering away at VMware’s costs. This time, Microsoft is going after VMware by using the virtualization giant’s own online cost calculator for server virtualization against VMware.

[ Also on InfoWorld: VMware vCenter Server 5.1 will soon support Microsoft Hyper-V servers | Midokura launches network virtualization solution for IaaS | Track the latest trends in virtualization in InfoWorld’s Virtualization Report newsletter. ]

In a recent TechNet blog post, Microsoft claimed that VMware’s cost-per-application calculator, an online tool that compares the cost of virtualizing applications on VMware vSphere 5.1 versus other commodity virtualization offerings such as Microsoft Hyper-V and Citrix XenServer, confirms what Microsoft has been saying for years: VMware is more expensive than Microsoft.

Using VMware’s own calculator, Microsoft urges would-be customers to plug the following values in for themselves:

1. Number of VMs: 100
2. Virtualization host type: Server B
3. Network storage type: iSCSI SAN
4. Compare to vendor: Microsoft
5. VMware vSphere 5.1 edition: Enterprise Plus
6. Management deployed on physical or virtual: virtual
7. Electricity: low
8. Real estate: low

According to Amy Barzdukas, general manager of server & tools marketing for Microsoft, the above values weren’t randomly chosen, but instead represent a common data center virtualization scenario.

The results of this calculation shows that the cost per application to virtualize 100 applications using VMware vSphere 5.1 Enterprise Plus edition is 19 percent higher than with Microsoft Hyper-V and System Center 2012.

Barzdukas said VMware’s own calculator confirms that VMware vSphere 5.1 costs more than Windows Server 2012 and System Center 2012 combined. She also said Microsoft isn’t just talking about license acquisition costs, but the capital expenditure costs (CAPEX), including power, space, storage, and server hardware costs.

To throw additional fuel on the fire, Barzdukas goes after VMware’s calculator claims of having an advantage of being able to run more applications than other hypervisors based on a third-party, VMware-commissioned report from August 2011 that took into account a now older version of Hyper-V. She writes:

We firmly believe you will save far more with Microsoft. According to VMware’s calculator, Microsoft’s total software cost ($974) is much lower than VMware’s ($1,491), but the infrastructure cost ($1,198) is higher than VMware’s ($1,083) infrastructure cost. Why is this the case? This happens because the calculator assumes that a VMware ESXi host can run 20% more applications than a Microsoft Windows Server 2012 (Hyper-V) host — an assumption with little credibility or real-life customer evidence.

It took VMware four short days to pen a response on one of its blog sites known as Virtual Reality and to “[set] the record straight one post at a time.”

In the response titled “Flawed Logic Behind Microsoft’s Virtualization and Private Cloud Cost Comparisons,” VMware offers a different perspective. According to Chanda Dani, product line marketing manager at VMware, the cost-per-application calculator was designed to rebut Microsoft claims that Hyper-V is five to 10 times cheaper. Beyond Microsoft’s single example, Dani said VMware’s calculator shows that the acquisition cost, even when choosing vSphere Enterprise Plus (VMware’s highest and most expensive edition), is at parity with Microsoft and actually beats Microsoft for most configurations.

After changing out a few different inputs of the calculator on my own, the cost between solutions does come closer to zero percent at different times.

I also concluded that Microsoft’s example above might be a bit erroneous. With only 100 VMs in an environment running on Server Type B (2CPU Quad Core, 64GB of RAM) and using an iSCSI SAN back end, organizations with this type of setup would probably be able to get away with using VMware’s Enterprise Edition (only a 12 percent higher cost) or even the Standard Edition (making VMware cheaper than Microsoft by 7 percent) as opposed to Enterprise Plus. Customers of Enterprise Plus will more often than not operate with a greater number of VMs (making VMware less costly) and upgrade to Server Type C (2CPU Six Core, 128GB of RAM), which again seems to work in VMware’s pricing favor.

Do the cost comparison with your own real-world use cases and see how things turn out.

Microsoft isn’t the only company that can throw out zingers. In the VMware blog, Dani calls out Microsoft by saying, “The Microsoft blog is yet another attempt to artificially inflate VMware’s prices and distract customers from the shortcomings of their own products.”

Personally, I’m not a huge fan of vendor online calculators. One of the problems I have with this particular calculator is that it is based on list pricing. Honestly, how many enterprise organizations are paying list price for their software these days? The other problem is that these types of calculators are usually designed to show favorable results to the owning vendor. But as Microsoft shows, that isn’t necessarily the case here. At the end of the day, one thing that might sting VMware a bit is the fact that quite a few calculator assumptions clearly show Microsoft is the cheaper solution. It stings only because it is VMware’s calculator.

But keep in mind, VMware isn’t the one going around town claiming to be the cheapest solution on the market. That’s Microsoft’s shtick. If VMware comes close, reaches price parity, or becomes the cheaper option, how does that affect Microsoft’s pricing claim?

When you virtualize your production environment, is the cheapest solution your company’s primary consideration?

This article, “Microsoft turns the tables on VMware’s cost calculator,” was originally published at InfoWorld.com. Follow the latest developments in virtualization at InfoWorld.com.