News that VMware is to upgrade its high-end ESX Server and VirtualCenter product suites and reduce the entry-level prices has been welcomed by both analysts and users.

The two suites and previously separate modules, including capabilities for symmetrical multiprocessing for virtual machines (VMs), have been bundled into a single package called Virtual Infrastructure (VI) 3, which is offered in three versions. The entry-level VI3 costs $1,000 (£540 + VAT).

Scott Donahue of analyst firm Tier 1 Research said VMware had previously been criticised for the high price of ESX Server compared with the cost of server hardware. "A lot of enterprises are making VMware the standard for new server deployments, so price is going to be a big factor. Being able to move down to lower price points also helps VMware compete with Microsoft and XenSource, especially for server consolidation projects."

Donahue said the new features move server virtualisation forward from consolidation to being a more holistic way of managing the datacentre. However, he warned against comparing the features in VI3 with those of Xen or Microsoft's virtualisation tools. "We don't know what features XenSource will have available, and Microsoft's hypervisor is two years out and we don't know what features will be in Carmine, which is the codename for its VM management tool."

Presumably Carmine will be able to manage other hypervisors, but this is not yet clear, he added.

Interoperability is fast becoming a hot topic. VMware has published many of its technical specs, and its president, Diane Greene, said recently that it does not matter whether the industry uses APIs and other technical specifications from VMware or from another vendor – the important thing is that the industry chooses an open standard.

Donahue added that standardisation around management tools is important. "A standard management interface for virtualisation will help a lot because it will enable firms to manage Microsoft, XenSource and VMware environments in a similar fashion," he said.

VI3 includes a new high-availability (HA) feature and a Distributed Resource Scheduler (DRS) for server load-balancing. "These tools move the story on from server consolidation to business continuity," said Donahue. "It's moving a lot closer to the utility computing vision, where you manage servers dynamically."

Jeff Hunter, an IT consultant for the US-based Nationwide insurance firm, welcomed the latest news. He has been using a beta test version of VI3 since February, and expects to roll out the finished version to test and development roles when it is available in about a week's time.

Hunter is keen on the Consolidated Backup tool, which he said gives the flexibility to make snapshot backups at more or less any time, either of a complete virtual disk, or of individual files.

Hunter also welcomed new user-based management tools. "We need to be able to delegate some control to business units without giving them full rein," he said. "New roles and permissions in VirtualCenter 2 will let us do that on a much more granular level." However, Hunter added that the HA and DRS features were the two main items of interest to Nationwide's business units.