Other than ESXi/vSphere having a fundamental breakout (the worst thing that can happen to virtualisation) security flaw, CRN reported that VMware is concerned about the competition. The memory vTax that they announced at VMword 2011 is allegedly going to be dumped next week with the vSphere 5.1 announcement at VMworld 2012.
Has anyone asked if there will be vTax refunds for those folks who have coughed up for the virtual memory licensing of vSphere?
I guess that Netscape Novell VMware has learned that those who don’t learn from history are doomed to repeat it. In some cases, they are doomed anyway.
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First, the breakout problem is going to be damaging to VMware’s reputation, and is great timing for Server 2012’s immanent release.
Even if they drop the vTax, they still have a huge cost in management overhead to have the same features in Microsoft Hyper-V/SCVMM. While this is a start to get slightly more aligned with Microsoft, its still not going to be enough. If they want to stay competitive they also need to up the features in their “Free” hypervisor to at least match the features in Hyper-V 2012 (without SCVMM).
They have made the mistake already with their vTax, and you can see where their motivations really lie.
I’m not sure they can save themselves now, I really believe the spiral of losing their market dominance has already started, and is going to be hard to stop. Only way out, drop vTax, increase the features in the free hypervisor (clustering, vmotion, replication, etc), and put the value add features in their vCenter product (and drop cost of that product!) to make it compete with the whole System Center line. However, this will result in a major cut to their profit margins, but that would mean the company needs to have a total shift back to innovation.