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By | Kelly Fiveash 3rd November 2008 17:05

VMware does U-turn on recent, unloved price hike

Channel players grumble at sudden change of heart

VMware has cancelled out the 10 per cent price hike it applied to its virtualisation products back in August thanks to a more favourable exchange rate in the European and Asian markets.

However, the move has upset some channel players, who have recently adjusted the VMware products they sell to the new price list the company brought into play at the start of September.

At the time VMware justified its decision to jack up pricing of its V products because of the speed at which the exchange rate moved against the firm, which is a US-based biz.

VMware’s senior EMEA partner director Matt Piercy told The Register that the company, which is owned by storage giant EMC, always planned “to respond as quick as we can” to changing market conditions by bringing its pricing back into line.

When asked if the price cut had anything to do with the firm’s rival, Microsoft – which recently began selling its own virtualisation software, Hyper-V – Piercy hit back by saying if that had been the case then prices would have been slashed in the US as well.

He said that despite a tricky trading environment, VMware remains the market leader and, unlike Microsoft, the company’s software has been “proven in production for three and a half years”.

Piercy also trumpeted VMware’s bare-bones ESXi hypervisor which the firm recently decided to give away for free.

He admitted that some European and Asian channel partners, who were only told of the change on Friday, had reacted negatively to VMware’s sudden pricing U-turn and apologised that it happened so quickly.

VMware was also unable to offer distributors and ultimately customers any solid guarantee that prices won’t spike in the near future if the US dollar shows signs of flagging again.

“We’re not in a position to make any reassurance on that”, said Piercy, who noted that the price hike in September was the first the vendor had made in six years in the competitive international software market. ®

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