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Microsoft parades customer ditching VMware

CH2M Hill plans to dump VMware for Hyper-V

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Microsoft is still refusing to showcase Hyper-V at VMworld in protest of VMware rules that Microsoft believes are designed to limit competition, but that doesn't mean the Microsoft hype machine will abstain from anti-VMware marketing.

In advance of next week's VMworld, Microsoft is touting a customer that is implementing a long-term plan to replace VMware with Microsoft and claims the move will provide savings of $3.2 million in the next three to five years. The customer, CH2M Hill, is ranked just outside the Fortune 500 at No. 520 and has corporate headquarters in Colorado.

VMware doesn't deny that the price of its virtualisation software is higher than the competition's. But VMware has long argued that vSphere, its primary virtualization platform, and the related management tools are so efficient that the total cost of ownership is actually the best in the industry when measured on a per-virtual machine basis.

It is becoming harder for VMware to make that argument as competitors Citrix and Microsoft are acknowledged by analysts to be closing much of the gap in features and functionality.

VMware notes that every company in the Fortune 100 uses VMware, but the growing viability of alternative platforms has made it easier for customers to choose less expensive virtualization software. In many cases, they only do this for a subset of their virtualization deployment, and leave their most important virtualized applications on VMware-based hosts. That is precisely why Microsoft is touting the CH2M Hill story -- the customer is planning to dump VMware entirely.

"We're not seeing a problem putting anything we have on ESX into our Hyper-V deployment," CH2M Hill's Greg Barton, a senior analyst in charge of the company's virtualization project, says in an interview with Network World. Especially with new Hyper-V memory oversubscription features CH2M Hill is testing, Barton says "we're not seeing a huge difference in either product."

But CH2M Hill's move from Hyper-V to VMware is not exactly as cut and dry as Microsoft's public relations department would like.

Because of existing software licenses and maintenance contracts with VMware, and CH2M Hill's strategy to lease servers on a 3- to 4-year basis, Hill says the plan to switch from VMware to Hyper-V will take between three and five years.

"We have an investment with ESX. We're not going to just dump it right now. But we're going to augment and eventually move toward Hyper-V," with the end goal of getting rid of VMware entirely, Barton says. The main driver is cost: "This last couple of years haven't been great for the IT budget," he says.

Naturally, the project's extended time span could let CH2M Hill officials change their minds and scale back their Hyper-V plans. But Hill says VMware would have to make a pretty "compelling" move to make up for the difference in price, now that "the [Hyper-V] functionality is on par." Hyper-V is available either as a free stand-alone product or as part of Windows Server 2008 R2.

CH2M Hill used VMware to set up 350 virtual machines in its corporate data center on about a dozen physical Dell servers, and deployed another 100 VMware virtual machines in regional offices.

The Hyper-V deployment is limited to just six physical boxes so far but Barton says they'll expand that within the data center and deploy Hyper-V clusters in as many as 40 branch offices across the country.

Barton acknowledges that the Hyper-V deployment is fairly limited at the moment, but says the project will produce significant savings as CH2M Hill rolls virtualization out to the regional offices, which would have been more expensive with VMware.

"We're right in the beginning of it," he says. CH2M Hill and Microsoft estimate that the customer will save $280,000 by avoiding further VMware licensing fees.

"Plus, we can now afford to tackle our 600 field servers and are aiming to virtualize 20 percent of these computers each year," Barton is quoted as saying in the Microsoft press release. "At $5,000 a server, that's a savings of $3 million over the next three to five years."

Barton expects management to be simplified by switching from VMware to Microsoft because CH2M Hill was already a Microsoft shop.

"The folks out in the field, they're all used to the look and feel of a Microsoft server," Barton said in his interview with Network World. "It's easier for them to get up to speed," and easier to set up a Hyper-V cluster from scratch.Applications slated to be placed in Hyper-V hosts include SharePoint, databases running SQL Server 2008, and Exchange Server 2010.

"It has to be a very needy machine to not go into virtualization at all," Barton says. Barton won't be making the trip to VMworld in San Francisco, but Microsoft executives will be there in hopes of convincing more VMware customers to switch vendors.



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