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Did Microsoft just agree with us that Hyper-V is NOT 1/6th the cost of vSphere?

Despite the fact that Hyper-V R2 addresses some of the issues of R1, Microsoft Hyper-V still cannot compete with VMware vSphere on a value-added capabilities and functionality. Just look at how Burton Group (“Microsoft Hyper-V Still a Work in Progress”) still deems Hyper-V R2 as not enterprise-ready. Therefore, Microsoft resorts to competing with VMware on cost. As such, Microsoft execs have been going around touting how Hyper-V is an order of magnitude cheaper than vSphere. Actually it is funny to see how the fraction they cite keeps changing — the claim started at 1/3rd the cost of VMware (“…We [i.e. Microsoft Hyper-V] are one-third the price of VMware’s”), then became 1/5th (“…the cost of vSphere Enterprise is five times that of buying the Microsoft solution”), and now Microsoft execs are saying 1/6th the cost (“…Hyper-V, which ships with Windows Server 2008, costs one sixth that of VMware’s virtualization solutions”). I guess 1/3rd didn’t work or something so they keep marking it down – 25% off, 50% off, no wait if you buy now 75% off!

Given all this noise, imagine my surprise when I see a Microsoft blog that basically debunks Microsoft’s own “1/6th the cost” claim. In “Investigating the VMware Cost-Per-Application Calculator”, a Microsoft employee publishes a lengthy dissertation on our updated VMware Cost Per Application Calculator with which we demonstrate how thanks to its superior technology vSphere is actually a less expensive solution than Hyper-V. It appears that the author’s intent was to point out our model’s supposed flaws. But, one would have expected that after he “fixed” all of our “flawed” assumptions, his calculations would definitively show Hyper-V as truly 1/6th the cost of vSphere. However that’s not the case at all. In, fact, the only clear takeaway from Microsoft’s blog, after all the twists, turns, objections and re-calculations, is that Hyper-V is nowhere close to being 1/6th the cost of vSphere. Even in the author’s best case scenario for Hyper-V, in which Hyper-V hosts run more VMs than vSphere ones thanks to more physical RAM on the Hyper-V hosts, Hyper-V is only 31% less than vSphere’s highest-end edition. Last time I checked, 31% less is nowhere near 1/6th the cost. If he had compared Hyper-V to lower-end editions of vSphere, those that more closely match what Hyper-V R2 delivers, there would have been practically no cost advantage for Hyper-V R2.

The bottom line is that Microsoft’s blog doesn’t uncover anything new about the VMware Cost Per Application Calculator. Quite the opposite, it confirms it. Try our calculator for yourself and create a customized report. You will find that it includes a sensitivity analysis showing vSphere’s cost per application at different consolidation ratios. The analysis clearly demonstrates that even at equal consolidation ratios (worst case scenario for vSphere), Hyper-V’s total acquisition cost is, at best, only marginally lower. Once you factor in vSphere’s tremendous consolidation ratio advantage over Hyper-V and vSphere’s ability to scale up to 2X more VMs than Hyper-V (check-out the “Evaluating the ESX 4 Hypervisor and VM Density Advantage” report), vSphere delivers the lowest cost per application by up to 20-30%. In fact, often vSphere becomes a less expensive solution than Hyper-V with just 1-2 more VM’s per ESX host – in addition to being a much more functional, more scalable, more proven product.

So you can either believe us when we say that Microsoft Hyper-V is actually about the same cost as VMware products or you can believe Microsoft when they say that VMware solutions cost about as much as Hyper-V – take your pick!

OK, now let’s get back to talking about how virtualization technologies solve business needs. Oh, and thanks Microsoft for busting your own myth.

13 thoughts on “Did Microsoft just agree with us that Hyper-V is NOT 1/6th the cost of vSphere?

  1. Shawn

    The only issue I have with these cost comparisons is that you can never really get an apples to apples comparison. For example, if you add the System Center suite licenses to the Hyper-V solution to get SCOM and its Pro Tips integration (DRS equivalent) you actually get a much deeper management experience than Vmware. You have full visibility into the applications running on the VMs (Exchange, AD, SQL, etc)
    Vmware does a better job at the virtualization layer, but Microsoft manages its applications better.

  2. Mark

    @Shawn – VMWare provide AppSpeed to deliver that kind of functionality – and it delvers allot more than SCOM can provide.
    I’d argue that in many cases, Microsoft’s ‘integrated’ management tools are only truly useful in pure-Microsoft environments, which few businesses have.
    In a heterogenous environment, VMWare’s tools are highly complementary regardless of what management is used elsewhere, and in some cases can act as a more complete ‘overseer’ of all OS and application activity.

  3. Alberto Farronato

    @ Shawn – Thanks for reading the blog and for the feedback. You are right: cost comparisons are never perfect because solutions aren’t the same from a feature stand point. I would argue that it is not just about features that are offered by one and not the other, but even those that on paper are considered “equivalent” most often than not are not actually the same. Following up on your example, there is a big difference between PRO Tips and DRS. Microsoft puts them on the same line when they make checklist comparison, but in practice the engine and capabilities of VMware DRS are far superior than those of PRO Tips. Cost comparisons don’t capture this kind of stuff also. There are many other examples like this. Our point here is that Microsoft’s blog just confirmed that even in the best case scenario for Hyper-V, the potential cost advantage that Hyper-V may have doesn’t compensate for the features and capabilities it misses when compared with vSphere.

  4. Peter Wilemsson

    Well, I am sorry to say VMware but sooner or later MS is going to take that place of yours.. You have another struggle to fight when it comes to price it is your vShpere price compared to the 0$ XenServer price.. have you done any calculations upon that? or are you waiting for Microsoft to do that for you? heheheh :-)
    Just joking, you have a good software no question about it, however your licensing model is killing us.

  5. Alberto Farronato

    Peter,
    we didn’t want to take that chance and so we actually did the calculations for XenServer as well. Check out our Cost Per Application Calculator at http://www.vmware.com/go/costperappcalc (assumptions and formulas are in the methodology doc linked from the calculator itself)
    After you go a step beyond Citrix marketing claims, you will find that XenServer is everything but free:
    1) you still need to pay for support
    2) you also need to purchase Citrix Essentials if you want to use basic functionalities such as HA or performance monitoring for your VMs
    Ultimately our goal is to continue to innovate and to deliver more value than our competitors. So far, we have been able to achieve this since way more people are willing to purchase our products than those of Microsoft or Citrix. Our plan is to keep this going and I think vSphere proves it very well.

  6. Tom Courtney

    @ Alberto, To get anywhere near the features offered by vSphere in XenServer you still need to pay $5000 per server. != Free
    @ Pro vs DRS
    I’d really like to hear from someone who has used both. Can Pro migrate VM’s live or is it only on startup?
    And another comment that I would like to make (because I’ve just been grilled by a MS sales rep) is that to conform to the licensing agreements with MS, every virtualization platform (VMware, XenServer Virtual Iron, Hyper-v) requires you to purchase MS server 2008 standard, enterprise or datacenter editions with enough licenses to cover where your Windows VMs are sitting in the physical world. MS licensing is attached to the HW and doing a vMotion or equivalent violates the licensing agreement.
    So say you have a W2k8 VM and it moves from one host to another using DRS or other mechanism. You must have 2 W2k8 licenses not to break their terms.
    I would really like someone to point me to a document that proves me wrong. But for now…
    Stuff you MS

  7. GG-Milan

    @Tom and everyone:
    Buy MS Licences with SA software assurance and you’ll have the right to migrate VM’s even though only once every 90 days… not great but arguable… MS has licensing models of its own server on its side..
    Agree, stuff you MS but no doubt you’ll win the race unless something serious turns up.
    Love you VMware, keep the work up as long as possible.
    Reminds me of tiny Funambol seeing its final days after Google Sync turned out… Still has something more but most won’t bother and stick to the easyest solution…
    Stuff quite a few lazy admins too :-)

  8. Alberto Farronato

    @ Tom – Yes, with Windows Server 2008 R2 Pro Tips allows you to use live migration to move VMs, provided as you say that you have appropriately licensed all your hosts with Windows Server 2008 R2 as you described. To leverage Pro Tips you will also have to purchase System Center Virtual Machine Manager and System Center Operations Manager. Once you look at prices you’ll find that the easier and cheaper way to buy SCVMM and SCOM is through Server Management Suite Datacenter ($744 per managed socket – min of 2 sockets per server – with rights to run unlimited number of VMs per managed host, per server) or Server Management Suite Enterprise ($1,198 per managed host with rights to run up to 4 VMs per managed host). You’ll also have to purchase a management license for each SCOM server ($1,321 w/SQL, $579 w/o SQL). Note that Microsoft has just announced a 75% price increase on SMSD/E starting from July 1st in reason of new added capabilities.
    With respect to the comparison between Pro and DRS there is a lot to say. Microsoft argues that they are equivalent, but in reality this is far from being true. The most fundamental difference is that Hyper-V has no concept of Resource Pools so it doesn’t really abstract and aggregate server resources into logical pools. Why is this important? It is very important actually, because it allows DRS to manage servers resources totally independently from the manufacturer brad. Once added to a DRS cluster a server because a contributor to the total amount of resources of that cluster and load balancing is totally abstracted from any hardware dependences. With Pro Tips, instead, you have to upload vendor specific “Pro Packs” into SCOM – for example HP Pro Packs for HP servers – which are built to monitor HP severs. What if you want to add an IBM or Dell server in the same cluster? You’ll have to manage multiple sets of Pro Packs that most likely don’t take each other in consideration. There are several other difference…this is a good topic for a new blog post :-).
    @ GG-Milan – I don’t think that moving a license every 90 days is a viable solution. Are you going to do load balancing every 90 days? I doesn’t seem to be acceptable even for the simplest of the environments.
    No disrespect for the Funanbol guys, but at this stage it seems to me there is quite a bit of difference between VMware and them. VMware is a $2B company with a very large customer base that has already made long term investments in our technology. Could this change if we sit around doing nothing? Sure, but our plan is to continue pushing the envelope.

  9. Iain

    Just another iron to stick in the fire…. Hyperic is now being intergrated and will be available very soon in the UK channel. This additional management layer will take care of hardware, OS, application (especially for custom apps), single pane of glass time.
    This is now a “VMware” product, available at a low price point to manage a mixed environment, both physical and virtual. Can’t wait to see it in practice.

  10. Hostess milano

    Great article here! because we were waiting for Microsoft employees such as yourself to do it. Interesting that you didn’t mention it.really I fully agree with you!!!

  11. Lester, the adult tricycle man

    While I like the current state of Hyper-V, the one issue that will stop me from deploying it is the way that various system keystrokes are handled. The Windows + keys are not passed to the client OS at all. So you have to use the mouse to control everything.

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