Server virtualization is no longer a one-horse race, as Microsoft, Citrix and others compete more convincingly with market leader VMware.
VMware has enjoyed a long run as king of x86 server virtualization, and the pioneering vendor remains the one to beat when tallying enterprise market share. But its competitors, particularly Microsoft and Citrix Systems, are gaining ground as IT executives begin to view server virtualization not only as a means to cut costs in the data center but also as a baseline technology for enabling cloud computing.
VMware introduced its first x86 server virtualization products in 2001. It wasn't until a few years later that the first commercial versions of the open source Xen virtualization hypervisor hit the market, and Microsoft's release of Hyper-V followed in 2008.
With its generous head start, VMware started winning customers, particularly among large enterprises looking to save money and gain efficiencies by consolidating data center assets. As interest in the technology rose, so did VMware's marketshare. In early 2008, researchers estimated that at least 50% and as many as 80% of enterprise customers were using its hypervisor.
Despite the high numbers, the race to virtualization is by no means over. Virtualization deployments have been expanding over the past several years, but plenty of workloads remain to be virtualized. At the end of 2009, only 18% of enterprise data center workloads that could be virtualized had been virtualized, according to Gartner. The number is expected to grow to more than 50% by the close of 2012.
Vendors including Microsoft, Citrix (which acquired XenSource in 2007), Oracle (which acquired Virtual Iron in 2009), Parallels, Novell and others are gunning for new virtualized workloads, and they're using management capabilities, automation technologies and vendor partnerships to sweeten and differentiate their offerings.These tactics are timely. As today's IT buyers mull virtualization technologies, they're considering a lot more than just the hypervisor used to create virtual machines. IT teams need tools to manage virtual server technologies from x86 environments back to the mainframe, across multi-platform hypervisors and consistently alongside physical machines. They also need security and monitoring tools, and capabilities such as live migration to maintain business continuity.
Enterprises have learned they need to carefully track the configuration of virtual machines to ensure compliance with business policies and prevent virtual server sprawl – particularly as they get their IT infrastructures ready for cloud computing.
Virtualization is a critical step in the journey to the private cloud, according to Matt Eastwood, group vice president of enterprise platforms at IDC. "Customers are quickly moving beyond the core hypervisor and focusing on mobility, self-provisioning, and metering and chargeback capabilities," Eastwood said in a statement. “As a result, IDC believes that automation tools increasingly represent the battleground in determining the winners and losers in a marketplace which is rapidly reshaping itself."
For its part, VMware has been beefing up its management and automation capabilities, most recently by acquiring IT management technologies from EMC's Ionix portfolio for about $200 million. It also is part of a three-way partnership with Cisco and EMC to develop a series of cloud-computing platforms, called Vblocks, that are based on servers and networking gear from Cisco, EMC's storage, and VMware's VSphere virtualization software.
In its latest Magic Quadrant for x86 server virtualization infrastructure, Gartner recognizes VMware as the market leader. But it also acknowledges some challenges.
"VMware's challenge is to protect and grow its installed base and technology leadership as it expands into complementary markets that leverage virtualization, such as cloud computing," Gartner writes in its report, released in late May.
Citrix, meanwhile, has emphasized its virtualization management offerings – both for its own XenServer hypervisor and longtime partner Microsoft's Hyper-V platform – and made its hypervisor technology available for free to entice customers.
"Its bold move to make XenServer (including XenCenter and XenMotion) free has resulted in a large upswing of product activations. However, the vendor has not yet been able to monetize that with product maintenance agreements or its add-on Essentials management offering," Gartner writes about Citrix in its Magic Quadrant. "Citrix is also trying to find a comfortable complementary role with Microsoft's Hyper-V, adding extended management tools to Microsoft's offering (which might reduce its reliance on its own offering, XenServer)."
Microsoft, too, has been working to emphasize virtualization management capabilities available in its Systems Center Virtual Machine Manager, and it has emphasized its multi-vendor approach to management. By making its hypervisor available for free, packaged with Windows Server 2008, Microsoft has steadily gained price-conscious users, particularly among midsize companies.
"Microsoft competes very well in midsize organizations that are just now beginning to virtualize," Gartner writes in its market evaluation. "Microsoft's biggest challenge is overcoming VMware's deep market penetration in all but smaller enterprises that have been slow to virtualize. In many ways, Microsoft has been left with the late technology adopters."
Pricing remains an important customer draw for Microsoft, Gartner says. "Microsoft's biggest trump card is that it does not need virtualization to be a stand-alone business, so it will be able to maintain a price advantage on VMware."
So who's the winner? VMware's early lead has been tough for its competitors to overcome. But in the big picture, there are plenty of widespread virtualization deployments still to be undertaken by midsize and large enterprises. As the key players compete for mindshare, enterprises get to enjoy the benefits of more mature offerings.