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VMware Offers to Slash Server Costs in Half

VMware Inc. has announced a new promotional program that guarantees at least 50 percent savings on server hardware, helping customers reduce cost with low risk. By Liam Lahey By ChannelPro

VMware Inc. has announced a new promotional program that guarantees at least 50 percent savings on server hardware, helping customers reduce cost with low risk.

By Liam Lahey

VMware Inc. has announced a new promotional program that guarantees at least 50 percent savings on server hardware.

Customers participating in the promotional program will work with the VMware Professional Services organization to deploy VMware's virtualization platform on existing servers using established best practices. Customers will not have to pay for the design and implementation services until at least a 50 percent savings on server hardware have been achieved.

"In today's difficult economic climate, this new promotion shows our commitment to customers and our confidence that we can help them reduce cost with no risk," said Bogomil Balkansky, vice president, product marketing, server business unit, VMware. "Based on our experience in thousands of customer engagements and data collected over more than three years with our Capacity Planner tool, we are confident that many customers will be able to achieve more than 50 percent savings on server hardware costs."

"VMware has been consistent in delivering value to its customers, but this new program raises the bar," said Mark Bowker, analyst for Enterprise Strategy Group. "In the current economic climate, no IT project--no matter how critical--will be funded without significant management review and approval. This is a welcome scenario for prospective and existing VMware customers--they get a proven virtualization platform with a substantial guaranteed and accelerated payback. VMware is helping its customers make frugal investments today that align with the overall IT spending patterns."

"This nicely ties results to IT spend which has been attractive in the past," said Rob Enderle, principal analyst, The Enderle Group. "I recall programs from both IBM and HP which attempted to share in the savings, the issues often come down to being able to reliably showcase the savings making it difficult to sustain the programs, however, it builds results into the effort and those results are golden both to IT who can then demonstrate progress and to the vendor who gets validated examples they can use to sell future projects."

In addition to the guaranteed savings promotion, VMware will also offer customers assistance with a server buyback referral program. This third-party service will enable customers to obtain appraised value for the server hardware that is no longer needed because of server consolidation.

Warren Shiau, senior associate, IT research, The Strategic Counsel, said VMware's promo is a very good "pay-upon-results" type of deal. But there's potentially more to this than just the cost savings

"One of the biggest issues for many IT organizations, big ones included, is having the metrics and measurement capabilities in place to understand what ROI they are generating from IT investments," he said. "Tying a contract to 50 percent cost savings on server hardware implies the implementation of some form of measurement. It could be a relatively simple measurement, but if it's getting along the way to something like a server hardware lifecycle cost measurement then you can see how it would help get metrics and measurement capabilities into the client organization."

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