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Helping SMB customers by using open source virtualization solutions

Open source virtualization solutions can benefit SMB customers through big cost savings – find out how to make money selling these products.

VMware currently dominates the virtualization market but other virtualization solutions may be worth looking into. Given that VMware encompasses all of many customer needs, cost savings provided by virtualization alternatives may be the best strategy to convince small and medium-sized business (SMB) customers to use them to start their virtualization efforts. 

Many vendors offer a virtualization solution, partly because many of them use one of the open source hypervisors for free. And from a business perspective, there's nothing better than making money from something that is free. Xen and KVM are the open source hypervisors that vendors such as Oracle, Citrix and Red Hat have built solutions around.

 

These solutions offer a significant cost benefit to customers when compared to VMware vSphere or Hyper-V. From the reseller perspective all solutions work similarly. Depending on the amount of sales a reseller generates, a higher discount is offered. But, because of the lower total cost to the customer, the reseller direct margin amount is reduced. In a scenario where you could sell a VMware solution with a 10% margin on the hypothetical sum of $ 10,000, or offer Red Hat and 15% out of $ 2,500, the reseller gain is obviously less. So for the SMB customer who is very cost sensitive it might be better to buy one of the cheaper solutions, but for the reseller this isn't necessarily the case. That means that solution providers will need to source revenue from something else, such as creating a better customer relationship by offering what's best for the customer. From that perspective, Red Hat's RHEV, Oracle VM or Citrix XenServer may be a good choice for your SMB customer.

The benefit of VMware is that it fits well in every environment. Virtualized Windows machines are installed easily on VMware ESXi. But some ccustomers are using a solution that is more specific, such Oracle Unbreakable Linux running Oracle VM.  This would give a customer a better price compared to the VMware offering.

Another player on the virtualization market is Citrix, especially desktop virtualization. Running products from the same vendor that integrate their server and their desktop virtualization environment will minimize the amount of training administrators need. And again, the Citrix solution is a lot cheaper than the VMware offering.

Another interesting player in the virtualization market is Red Hat. They have played a minor role in the past with their Red Hat Enterprise Virtualization offering (RHEV), but since the release of the first public betas of the new and completely re-engineered RHEV 3.0, they are advertising that they can do the same things as VMware for a lot cheaper. Thorough tests will have to prove that a solution like RHEV HA (which is included in the product by default) is indeed offering the same utilities as VMware HA, and this also goes for other parts of RHEV, but it looks like a promising product that offers virtualization for less than half of the price of VMware. This makes RHEV an excellent choice for SMB customers that have not yet implemented a virtualization solution because of budget constraints, opening up a new market for solution providers.

There is also a free version of VMware ESXi that can be used to build a decent VMware-based infrastructure. Most customers that start using the ESXi free edition will come back later and spend money on one of the advanced versions of vSphere.

Offering cheap virtualization is an excellent means for the reseller to show that he understands the needs of the customer. Initially that may mean there is less   revenue to be earned from product margins, but by offering the product that best fits the customer, cheap virtualization solutions can be a good investment in a long-term customer relationship.

About the author:
Sander van Vugt is an author and independent technical trainer, specializing in Linux since 1994. Vugt is also a technical consultant for high-availability (HA) clustering and performance optimization, as well as an expert on SLED 10 administration.

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