The question of how to manage virtualized environments as they scale up in size and complexity, and grow to host business critical applications (instead of just low hanging fruit tactical applications owned by IT) is clearly starting to get attention by larger vendors with serious ambitions in the virtualization performance management market. NetApp is acquiring Akorri, putting NetApp into a leadership position in Infrastructure Performance Management. Now SolarWinds acquires Hyper9.So what does this mean for VMware customers (as Hyper9 is a VMware focused management tool) looking for tools to manage their virtualization environments that are growing in size, complexity and importance? This acquisition is significant for several reasons:

  • VMware has 250,000 customers. Let’s declare that the top 25,000 of these customers are “enterprise” or large, and that the remaining 225,000 customers are what we consider mid-size enterprise, or even small-medium businesses (SMB).
  • SolarWinds has over 97,000 customers, the vast majority of them being network and systems administrators in what is considered the mid-size enterprise to SMB continuum of companies. Over 1 million people have downloaded and use the free SolarWinds tools and SolarWinds knows who these people are.
  • SolarWinds products (both the free and paid versions) do an excellent job of solving well understood systems and network management problems encountered every day by admin’s of these environments.
  • Hyper9 has a great product that addressed some really important problems (capacity management, and configuration management). This product is now available from SolarWinds with new pricing (see below).
  • SolarWinds is betting that its broad access to the admin community, combined with the clear out of the box value of the Hyper9 product, and the new pricing for the product will make it possible for SolarWinds to cost effectively sell the Hyper9 product to the VMware admin’s at those 225,000 “smaller” companies.
  • Existing vendors/products in the VMware ecosystem like VMware (CapacityIQ and AppSpeed), vKernel, Akorri (soon to be part of NetApp), Quest (vFloglight), Veeam (Monitor), VMTurbo, Xangati, and Zenoss are by and large not targeting the same size companies, or transactions at the same price levels as SolarWinds.
  • The competition in these 225,000 companies is not really products from other vendors, but time on the part of the admin crawling through vCenter and writing the occasional script.
  • The market leaders in terms of installed customers for this category (Resource and Availability Management) of solution are Quest (vFoglight) and Veeam (Monitor), both of whom have thousands of installed customers.  Both Quest and Veeam primarily go to the market through the VMware VAR (partner) channel – which has proven to be very effective for larger accounts that use these VARs for both consulting services and as a source for solutions.

SolarWinds Virtualization Manager (Hyper9) Pricing

The pricing below is based up the number of powered on VM’s, not sockets or cores.

Tier Product #of VM’s Price ($US) $/VM
Virtualization Manager  (Hyper9) VM50 50 $2,995 $60
Virtualization Manager  (Hyper9) VM100 100 $5,995 $60
Virtualization Manager (Hyper9) VM200 200 $10,995 $55
Virtualization Manager (Hyper9) VM400 400 $16,995 $42
Virtualization Manager (Hyper9) VM700 700 $23,995 $34
Virtualization Manager (Hyper9) VM1200 1200 $33,995 $28
Virtualization Manager (Hyper9) VM2000 2000 $52,995 $26

Conclusions

SolarWinds is betting that due to the size of its existing administrator community (the over 1M users of its free tools, and the 97,000 paying customers) that it can cost effectively reach the admin’s at the 225,000 VMware customers that are being under-served by the vendors targeting larger customers and larger VMware environments. Due to the size of the SolarWinds community, SolarWinds is in a unique position to succeed in this, and deliver a “management tool for everyone” to the VMware admin community just it has done with Orion for the network and server admin communities. Therefore SolarWinds intends to commoditize this market just as it has done with the Orion server and network tools.

Vendors pushing the envelope in terms of how much functionality is delivered at a low price is always a good thing for customers.  It is clear that many VMware Administrators have their own budgets and are buying VMware appropriate tools with this budget. We will just have to see whether this behavior and budget extends far enough down into the very large group of SME/SMB customers in order for SolarWinds to make Hyper9 as successful as Orion is over time.

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Bernd Harzog (324 Posts)

Bernd Harzog is the Analyst at The Virtualization Practice for Performance and Capacity Management and IT as a Service (Private Cloud).

Bernd is also the CEO and founder of APM Experts a company that provides strategic marketing services to vendors in the virtualization performance management, and application performance management markets.

Prior to these two companies, Bernd was the CEO of RTO Software, the VP Products at Netuitive, a General Manager at Xcellenet, and Research Director for Systems Software at Gartner Group. Bernd has an MBA in Marketing from the University of Chicago.

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