HPE offers free virtualization to lure VMware users

What happened?

During the HPE Discover event in Las Vegas, Hewlett Packard Enterprise announced a promotion allowing customers and partners to use its virtualization platform VM Essentials for free for one year. The offer also includes one year of HPE Zerto for just $1 to facilitate non-disruptive migration from VMware, and 0% interest financing through HPE Financial Services. VM Essentials is explicitly promoted as a 'VMware alternative' and includes an HVM (Hardware Virtual Machine) hypervisor and unified management that allows managing VMware ESXi and HVM clusters from a single console.

Additionally, from March to June, HPE offered one year free of VM Essentials via rebate to those who purchased an AMD server and a one-year VM Essentials license. It will also grant free three-year licenses to 600 channel partners who achieve the 'Private Cloud with Virtualization' competency by year-end (though they must pay support costs).

Why is this important?

HPE's move directly responds to widespread discontent caused by Broadcom after its acquisition of VMware. Broadcom eliminated perpetual licenses, bundled products into expensive packages, and changed vSphere licensing to a per-core model, skyrocketing costs for many companies. According to Jeremiah Jenson, HPE's vice president of channel and partner ecosystem for North America, VM Essentials can generate savings of up to 90% compared to VMware and helps 'eliminate vendor lock-in and simplify hybrid IT'.

The promotion also contrasts with Broadcom's strategy of drastically reducing the number of authorized VMware resellers. HPE, on the other hand, distributes VM Essentials exclusively through channel partners and offers incentives for them to adopt the platform.

Consequences and reactions

The initiative has been well received by some partners. Dean Colpitts, CTO of Canadian MSP Members IT Group (MITG), which was excluded from VMware's reseller program after 19 years of collaboration, called the benefit 'a step in the right direction', though he criticized it being limited to 600 partners, calling it 'very short-sighted'. Colpitts believes HPE should give VM Essentials to all its partners to 'facilitate its introduction at customer sites and displace competitors'.

The promotion could accelerate migration from VMware, especially among SMBs and organizations looking to cut costs. However, long-term adoption will depend on the maturity of the VM Essentials ecosystem, ISV availability, and ease of migration. HPE bets on Zerto as a tool for non-disruptive migrations, a plus point.

From a market perspective, HPE's offer is an aggressive acquisition tactic that can erode VMware's share in the on-premise virtualization segment. However, VMware remains the de facto standard in many enterprises, and switching hypervisors involves learning costs, retraining, and potential incompatibility with applications certified only for VMware.

What should readers know?

• The one-year free VM Essentials promotion is valid until further notice but includes conditions: only through channel partners and for new customers.
• The list price of VM Essentials is $600 per CPU socket per year, much lower than VMware vSphere's per-core cost after Broadcom's changes.
• HPE Zerto for $1 for one year facilitates live migration from VMware, reducing downtime risk.
• The partner offer (three years free for 600 partners) aims to build a trained reseller ecosystem but has been criticized as limited.
• VMware remains a solid option, but companies should evaluate long-term TCO and consider alternatives like VM Essentials, especially if they are already HPE customers.

'They need to launch VM Essentials as far and as fast as possible to gain immediate traction and attract ISVs, which will further increase adoption,' said Dean Colpitts, CTO of MITG.

Historical context

This is not the first time a hardware vendor has offered free virtualization software to steal market share from VMware. In 2012, Microsoft offered Hyper-V Server 2012 for free, and Red Hat did the same with RHEV. However, HPE combines temporary free access with migration services and financing, a more comprehensive proposition. The key difference is that HPE does not directly compete with VMware in the hypervisor market but seeks to capture customers for its hardware and services, replicating the 'razor and blades' strategy.