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VMware Cuts Prices

Thanks to a thriving market for its virtual systems software, VMware is drastically cutting the cost of one of its flagship products. The Palo Alto, Calif.-based company says that with double-digit growth in sales in recent quarters, VMware can afford to lower prices.

The company has reduced the price of its GSX Server running on Windows or Linux hosts to $1,400 for a two-CPU license or $2,800 for an unlimited CPU license. Previously, GSX Server cost $5,000 for a four-CPU installation and $10,000 for eight CPUs, says Michael Mullany, VMware’s vice president of marketing. A configuration for two processors or fewer previously cost $3,025, according to the company’s Web site.

While VMware is enjoying fast growth, it also doesn’t hurt that Microsoft just began shipping its Virtual Server 2005 product last month for $499 for the Standard Edition (up to four CPUs) and $999 for the Enterprise Edition (up to 32 processors).

VMware develops operating system virtualization software that runs on top of Windows or Linux and enables customers to run one or more sessions of another operating system – for instance, Windows XP -- on top of it. Virtualization, the ability to run multiple copies of multiple operating systems on a single physical computer, is an old idea that has been catching on recently in areas from software testing to server consolidation.

Founded in 1998, VMware claims to have two and a half million users and about 5,500 enterprise server customers. The company was acquired by EMC in December 2003 for $635 million.

About the Author

Stuart J. Johnston has covered technology, especially Microsoft, since February 1988 for InfoWorld, Computerworld, Information Week, and PC World, as well as for Enterprise Developer, XML & Web Services, and .NET magazines.

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