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VMware lures Virtual Iron customers with discounts

"Safe passage" from Oracle is what VMware is promoting as it dangles discounts over Virtual Iron customers. But VARs say VMware is leaving the rest of the work up to them.

In an attempt to lure nearly 2,000 Virtual Iron customers away from Oracle, VMware is offering discounts in its "Safe Passage" promotion. The problem is that VMware has not provided any sales leads to its partners or in-house sales team to help bring in those customers.

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This lack of effort from VMware Inc. gives some companies the impression that it wants the customer base but is not willing to go after them. VMware has been offering discounts to former Virtual Iron (VI) customers, including a 10% discount on the first year of support for contracts and a 40% discount for vCenter Server Foundation and Server Standard management tools.

"I believe the discounts are acting solely as a lure, trying to pull VI customers in and [helping them] take notice of what VMware has to offer," said Keith Norbie, vice president of sales and vendor management for Nexus Information Systems, based in Minnetonka, Minn.

"I think the main goal with these discounts is to give the perception of a big win in this market. If successful, this deal could give the company a lot of attention and help attract more people in [its] effort to dominate the marketplace," Norbie said.

Oracle Corp. announced it would stop selling new VI licenses June 30, 2009, but said it will continue to support the VI Extended Enterprise Edition and Version 4.4 through Sept. 3, 2009 and Version 4.5 through Jan. 14, 2010. VMware's Safe Passage promotion runs from July 1, 2009 through Sept. 30, 2009.

"We saw a real opportunity in the market and decided that we should jump on it. Our main goal with this promotion was to bring these customers in and really show them that we are the best and that we would have been the right decision in the first place," said Ryan Knauss, senior director of pricing, marketing and planning for VMware.

"The company is very active with both calling and emailing consumers [about] the market. If you are on the virtualization market radar they will most likely know about you," Norbie said.

VMware followed standard communication procedures, including the release of informational packets, press releases and full partner announcements to help get the Safe Passage promotion out to the public, according to Knauss.

"VMware is a channel-friendly company. As such, we have made this promotion available to our worldwide reselling partners via our standard distribution model. Our existing sales and execution practices apply to this promotion just as they apply to our standard offerings," Knauss said.

VMware would not disclose how many former VI customers it has won over, but Knauss said he was surprised by the amount of interest in the promotion.

Knauss wasn't the only one surprised. Jack Kaiser, vice president of business development and marketing for International Computerware Inc., based in Marlborough, Mass., said that he didn't really see any value in marketing efforts to obtain VI customers, and that his company hasn't really been spending a lot of time on it.

"I think that every customer is extremely important, but I also think it's important to focus on not just one area. If we see a disgruntled Virtual Iron customer, we would absolutely approach and try to sell him or her on the software. It's important to focus on the broad virtualization market, those who are unfamiliar with virtualization software and those that are looking to change. That's where our energy is primarily focused," Kaiser said.

So far there have been no promotional deals by other companies dealing with software similar to VI's. When asked why consumers would want to go with VMware instead of the better known Microsoft Hyper-V or Citrix XenServer, Kaiser said it was simply experience. "While VMware does not have the popularity of Microsoft, the virtualization software that VMware puts out is generations ahead of anything that Microsoft or Citrix could come up with."

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