VMware is changing the pricing model to a more pay as you go basis and is cutting by half the cost of its low-end offerings for the small business market.

The pricing changes are a reminder of how competitive it is getting as virtualization technologies become a means for deploying private clouds.

Microsoft this week announced it own initiative to launch private cloud environments at its Worldwide Parters conference. Microsoft is in alliance with Citrix, a competitor to VMware. For hardware, Microsoft has formed alliances with Dell, Hewlett-Packard and Fujitsu.

VMware has another approach. Its strategy is to help data centers run, secure and manage applications in the private cloud or have them bridged on-demand to partner-hosted public clouds

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VMware: Drops Prices by Half for Small Business Market