Outsourcers squeeze customers with virtualized pricing

27.11.2006
A number of outsourcing providers are still charging customers per physical server in a virtualized environment, squeezing customers for additional revenue.

"My outsourcer is charging me the same for a virtual server as a physical server," one customer said.

"Because virtualized servers can be deployed in 10 minutes instead of 10 days it leads to what I call 'virtual rabbits' - servers spring up everywhere so they have to be carefully managed."

According to IT managers, who requested anonymity, some outsourcers are charging per server, regardless of whether it is physical or virtual.

Recognizing that new pricing models are necessary as customers increasingly adopt virtualization technology, the larger outsourcing providers have adjusted their contracts.

VMWare Inc.'s Australia-New Zealand Managing Director Paul Harapin said IBM Corp., EDS Corp. and Computer Sciences Corp. have introduced new virtual pricing models to address the problem.