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Why is Hyper-V free?

Hyper-V Server is offered free of charge directly from Microsoft as a way to promote adoption of their enterprise-grade virtualization platform. By providing the core hypervisor functionality at no cost, Microsoft aims to get more organizations using Hyper-V and Azure cloud services.

Hyper-V Server overview

Before diving into why it‘s free, let‘s look at what exactly Hyper-V Server is:

  • It‘s a standalone product from Microsoft that only includes the hypervisor role, not the full Windows Server OS.
  • Runs on bare metal or can be installed as the OS of a virtual machine.
  • Supports creating and managing Windows and Linux virtual machines.
  • Lacks many features of the full Hyper-V role on Windows Server like live migration.
  • Does not include any licensing rights – you need separate licenses for guest VMs.

So in summary, Hyper-V Server provides core virtualization capabilities on a slimmed-down server OS distributed free of charge.

Drives adoption of Microsoft virtualization

By offering Hyper-V Server at no cost, Microsoft aims to drive greater adoption of their virtualization platform and tools across the industry. According to Spiceworks, Hyper-V market share increased from 20% to 30% between 2019 and 2022. And with VMware still controlling over 50% of the market, Microsoft has plenty of room to grow.

Providing the free standalone hypervisor allows organizations of all sizes to easily gain experience with Hyper-V. They can then upgrade to the full capabilities of Hyper-V on Windows Server or System Center Virtual Machine Manager as their needs grow. The free product serves as an easy entry point to Microsoft‘s virtualization ecosystem.

Promotes hybrid cloud with Azure

In addition to on-premises virtualization, Microsoft also wants to promote hybrid cloud adoption with Azure. Hyper-V provides a consistent management platform whether running virtual machines on-premises or in Azure.

The Azure Hybrid Benefit even allows you to migrate Windows Server licenses to VMs running in Azure to save on licensing costs. So again, the free Hyper-V Server product helps boost Microsoft‘s broader hybrid cloud strategy.

Competes with other free hypervisors

By offering their hypervisor free of charge, Microsoft can effectively compete with similar no-cost products like:

  • VMware vSphere Hypervisor – Also known as ESXi, this is VMware‘s standalone free hypervisor.
  • Oracle VM VirtualBox – Free desktop virtualization software from Oracle.
  • Proxmox VE – Open source hypervisor platform.

Making Hyper-V Server free eliminates cost as a differentiator when organizations are evaluating hypervisor options.

According to a Spiceworks survey, 34% of organizations use a free hypervisor product, so this is an important market segment that Microsoft targets.

Minimal impact on revenue

Microsoft can afford to offer Hyper-V Server at no cost because it does not significantly impact their revenue streams:

  • You still need licenses for any Windows or Linux VMs running on top of the free hypervisor.
  • Advanced functionality requires upgrading to full Windows Server licenses with Hyper-V role.
  • Paid Microsoft products enhance the hypervisor like System Center and Azure services.

By keeping the free product limited to core hypervisor capabilities, Microsoft provides an easy on-ramp to paid solutions as organizational needs grow.

Drives adoption from small businesses

Making Hyper-V Server freely available also allows Microsoft to drive adoption in the small business segment. According to Spiceworks, 44% of small and medium businesses use a free hypervisor.

Smaller organizations are often price sensitive, so eliminating the cost barrier to virtualization helps get them onboard with Microsoft‘s solutions. If the business grows, they can upgrade within the Microsoft stack instead of switching platforms.

Enables evaluation usage

Downloading Hyper-V Server allows organizations to test out Microsoft‘s virtualization management experience even before purchasing. Hands-on usage during a proof of concept reduces uncertainty and builds confidence in the platform.

According to reports, over 70% of organizations conduct proof of concepts with products before purchase. So the free Hyper-V Server facilitates this important evaluation process.

Alternative to public cloud resources

With the rise of cloud computing, Microsoft also wants to provide an on-premises alternative to paying for public cloud resources. Hyper-V Server lets organizations gain the flexibility of virtualization without needing to consume hosted resources.

And again, Microsoft provides hybrid capabilities that allow seamlessly migrating between on-premises Hyper-V and Azure cloud environments. So the free product helps them compete with pure public cloud providers like AWS and Google Cloud.

The takeaway

In summary, Microsoft offers Hyper-V Server as a free product in order to promote the broader Microsoft virtualization stack, compete with other hypervisor vendors, minimize barriers to adoption, and integrate with their hybrid cloud solutions.

By providing the core functionality at no cost, organizations of all sizes and resource levels can easily gain first-hand experience with enterprise-grade virtualization from Microsoft.