Virtualization: Microsoft Picks Up Momentum, VMware Lags, Citrix Stumbles

An increasing move to second sourcing came as a particular surprise to Gartner in its list of 'Top Five Server Virtualization Trends, 2012', says Tom Bittman, a vice president and analyst with Gartner Research.

“More and more VMware customers are saying they’re not planning to move away from VMware,” he emphasizes, “but they’re very interested--perhaps for new deployments or a business that isn’t virtualized yet or a branch office--in looking at a secondary vendor. For net new [customers] it’s the 80/20 rule: they’re looking at having a secondary vendor for new technology and getting a new footprint in that technology and learning something new, and perhaps to gain leverage to negotiate with VMware.”

Attendees at a Gartner data center conference in December, which Bittman says draws large enterprises, were surveyed about which virtualization technologies they are using, and they could answer however many they have in their IT departments in priority order, he says. VMware dominated, which he says didn’t come as a surprise, but only 5% said they only have one hypervisor. Another approximately 50% said they have two and another 30% said they have three, which Bittman says is likely comprised of Microsoft and Citrix.

Attendees were also asked how important a heterogeneous virtualization management environment would be in their organization by 2015. Only 21% said it wasn’t important; 79% said it was either somewhat or very important; and 43% said it was very important, he says. “What this is telling me is aspirationally, they want heterogeneity. They want to manage [virtual environments] centrally. When we talk to clients today, the advice we’re giving is that they should absolutely consider putting a second [virtualization] technology in.”

Bittman says there are other key trends reshaping server virtualization in 2012, among them that VMware’s competition has improved significantly in the past few years, and price is becoming a big differentiator. “Enterprises that have not yet started to virtualize--and they exist, but they tend to be small--have real choices today,’’ he notes.

Another trend for 2012 is that virtualization pricing models continue to be in flux, and a move toward private and hybrid clouds “will ensure that virtualization pricing will continue to morph and challenge existing enterprise IT funding models.”

Momentum for virtualization is growing and hitting 50% penetration, which is another trend, thanks to competition and new, small customers driving down prices, he says. “The market is growing, but not like it used to, and vendor behavior will change significantly because of it,’’ Bittman says.

The final trend for 2012 that Bittman sees is Infrastructure as a Service (IaaS) vendors “can’t ignore the virtualization that is taking place in enterprises. Creating an on-ramp to their offerings is critical, which means placing bets” on whether the IaaS vendors should create their own standards, buy into the virtualization software used by enterprises, or build/buy software that improves interoperability.

He says it’s not an easy choice for the vendors, and “winners and losers will [be] determined.” Just because the server virtualization market is maturing doesn’t mean that it is stabilizing, he adds. If anything, trends in this market “point to continued change and even some turmoil. Enterprises and vendors need to stay on their toes.”

In terms of vendor performance, Microsoft is starting to give VMware a run for its money, he says, especially for small businesses. There are also several open-ource alternatives, including Citrix and Red Hat, although Bittman believes “Citrix has kind of hit their peak with server virtualization. They started making their offering for free a few years ago, with the idea that people would pay for support and management tools, and they haven’t been successful monetizing that, so we think they’ve been losing market share lately to Microsoft and VMware.”

A newcomer in the virtualization arena, KVM (Kernel-based Virtual Machine) is an open-source virtual machine implementation that exploits an operating system's kernel. In May 2011, IBM and Red Hat, along with several other vendors, formed the Open Virtualization Alliance (OVA), an organization chartered with promoting KVM adoption. KVM has been ported to Intel VT-x and AMD-V; it has also been ported to S/390 architecture (IBM's System z mainframe environment); PowerPC microprocessors and IA-64. An ARM (advanced RISC machine) port is in progress.

The danger for VMware is the second-sourcing trend, Bittman says. “If it becomes significant, they will have to reduce their prices. Are they worth the money? I think it’s starting to get more questionable.”

VMware has features beyond what Microsoft and others can do, he says, such as some automation and management tools that are “unique in the market,” and the company is ahead of Microsoft by a couple of years. “But if the market was starting over today and there were no virtualization [vendors] out there, we’d have much more of a race between VMware and Microsoft.”

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