According to The Inquirer, it appears Dell is considering to stop charging VMware ESX Server 3i licensing fees on its PowerEdge servers to its customers. This was reportedly said by VMWare’s Senior Product Marketing Manager Martin Niemer and comes two weeks after the virtualization vendor announced it would start embedding the 32 MB hypervisor across Dell, Fujitsu-Siemens, HP and IBM servers.
This doesn’t come as a big surprise, as VMware had added to the previous announcement that hardware vendors would be able to choose which premium they would charge to end customers, if any. Expect the other hardware vendors to follow suit and drop the prices for including the hypervisors significantly (or even zero) if Dell comes through, especially with the sharp-priced Microsoft hypervisor Hyper-V on its way.
But don’t expect this to have a serious impact on the whole VMware reseller channel’s bottom line, as some blogs are proclaiming already. The real money is in the enterprise offering and upgrades anyway, and the smaller distributors and resellers have other advantages when it comes to SMB offerings besides pricing.