VMware beyond the basics

Server virtualization is the starting point. Utility computing is the destination.

Peek inside most enterprise data centers today, and you'll probably find at least one or two x86 boxes running VMware's server virtualization software. Odds are good the technology got there as part of an effort to consolidate an upward-spiraling number of industry-standard servers.

Peek inside most enterprise data centers today, and you’ll probably find at least one or two x86 boxes running VMware’s server virtualization software. Odds are good the technology got there as part of an effort to consolidate an upward-spiraling number of industry-standard servers.

Now, watch the number of virtual servers in production quickly escalate. Conditions are perfect: Enterprise IT executives are increasingly comfortable with the technology at a time when VMware is moving quickly beyond its roots in basic slicing and dicing. It is broadening its infrastructure focus and enticing companies with the prospect of true utility computing.

“Consolidation is still important. It’s an easy ROI story to tell, and it will continue to be a conversation-starter for VMware,” says Scott Donahue, vice president at Tier 1 Research. “But once it’s in there, it will be demonstrating its value around other things like disaster recovery and fault tolerance and performance and shifting applications — all the things you expect to get out of a dynamic computing environment.”

VMware wants to provide not just tools for carving up physical systems, but also an automated framework that promises the most efficient use of virtualized resources. Toward that end, it has opened its code so that partners, such as network interface card and applications vendors, can integrate better with its virtualization software. It’s also pushing for virtualization standards. Ultimately, VMware wants to turn x86 virtualization into the foundation for the New Data Center.

Not surprisingly, this push comes as VMware, which has dominated the market it created in 2001, faces a growing cadre of competitors (see “VMware competitors”). Among them are Microsoft and smaller companies, such as Virtual Iron and XenSource, that make use of Xen open source virtualization technology. Industry observers say the increasing competition should help spur VMware to improve its technology and reevaluate its pricing, which today seems to be the biggest — and only — sticking point for many users. VMware is starting to address the issue, selling its ESX Server and related management tools in tiered pricing, which starts at $1,000 per two CPUs and increases according to the features included. Previously, pricing for ESX Server alone started at about $3,800 per two CPUs.

“Yes, VMware is the leader right now, but like any other new technology provider, it’s important to watch what the company is doing and where it’s headed to make sure it continues to stay ahead of the competition,” says Barry Naber, assistant director for enterprise IT operations at International Truck and Engine. The Warrenville, Ill., manufacturer runs about 180 VMware virtual machines on fewer than a dozen servers across four data centers. “Right now, I’m pretty committed to VMware, and I think it’s headed in the right direction,” he says.

Infrastructure 3

Infrastructure 3, introduced last June, illustrates the course VMware has chosen. The software package includes updated versions of ESX Server and VirtualCenter management tools and VMotion technology for running virtual machines among physical servers. The Infrastructure 3 package includes new technologies aimed at letting users pool compute resources and allocate them to workloads automatically, depending on application demands.

Infrastructure 3 is the first step in VMware’s efforts to provide enhanced services on top of an increasingly reliable virtual foundation. Over time the company has shifted its focus from providing an individual hypervisor that lets multiple operating systems run on a single physical system, to managing a collection of virtual machines running on those servers, to talking now about data centerwide virtualization and mapping applications dynamically to those resources, says Raghu Raghuram, VMware’s vice president of platform products. “No customers are ever thinking about a single server anymore. They’re thinking about the aggregation of servers, storage and networking,” he says.

VMware addresses that perspective by working with storage vendors to streamline data access in virtual environments, and with networking companies to improve virtual server I/O. Concurrently, it will continue to enhance its underlying server-partitioning technology to take advantage of native virtualization support being built into processors from Advanced Micro Devices (AMD) and Intel.

Chip-level support will result in better performance and more capabilities for ESX Server, such as 64-bit processing, VMware executives say. Today server virtualization technology, such as VMware’s, relies on fancy footwork to enable x86 systems, which weren’t designed for virtualization, to support multiple operating systems and workloads. Often, finessing this support can strain performance.

VMware is moving smartly, says Charles King, principal analyst at research firm Pund-IT. “It’s very intriguing. VMware is taking its expertise in server virtualization and extending it out across the IT infrastructure. It’s a very ambitious plan,” he says, adding that in stepping outside its traditional comfort zone, VMware could face challenges and pitfalls ahead.

Enterprise IT executives agree VMware is making some wise moves. They look to VMware’s transition as important to the evolution of the virtualization market as a whole.

“The issue is that, once you virtualize, you solve some problems, but create others, such as how to deal with managing systems in a different way,” says Eric Beasley, a systems engineer at a large healthcare organization evaluating VMware’s technology. “It’s important that VMware continue to innovate as far as how it helps you manage and manipulate your virtual infrastructure.” (See “Managing the virtual realm.”)

An evolving market

Focusing on the management aspect of virtualization ultimately could push VMware into competition with partners, such as HP and IBM, analysts say. But VMware says its goals are more focused.

“I really don’t categorize what we’re moving into as management,” says Diane Greene, who founded VMware in 1998 and now serves as its president, as well as executive vice president of EMC, which acquired VMware in 2004. “We’re retooling the system infrastructure services, which is slightly different from management,” she says.

In other words, VMware is zeroing in on the virtualization layer to create a more flexible, highly available and manageable framework. “It’s utility computing made real and working,” she says.

Greene doesn’t see VMware butting heads with the larger systems-management vendors, but she says Microsoft could be a serious contender. For now, Microsoft’s Virtual Server is still in its infancy, and the software giant doesn’t have plans to ship a hypervisor until 2007 or 2008. A virtualization management package, code-named Carmine, also is a ways off. Still, enterprise IT executives are starting to look at Microsoft for server virtualization. According to a recent Forrester survey of 51 IT decision-makers, 73% are either using or looking at VMware, and 65% are considering Microsoft (multiple responses were allowed).

With Microsoft’s large installed base, “VMware will need to clearly identify how it is different from Microsoft and why customers should stay with a third-party provider,” says Clay Ryder, president of research firm Sageza. “VMware needs to be clearly different to overcome a Microsoft onslaught.

”Microsoft might not be VMware’s only threat. Analyst firms estimate just 5% of x86 servers are virtualized today, meaning a huge, untapped market is there for the taking. Other server virtualization companies, such as SWsoft, Virtual Iron and XenSource, could start chipping away at VMware’s market share.

“A lot of companies are trying to catch up" with VMware, says Daniel Burtenshaw, senior systems engineer at University Health Care in Salt Lake City. “I’ve tested other products, and VMware is ahead. But as those other products mature, it will help put the pressure on VMware to make its products just a little bit better.

”Already, competing products are beginning to gain a foothold. Virtual Iron, which uses the Xen hypervisor, in June announced its software had been tested and proven in production on IBM servers.

Virtual Iron’s software is similar to VMware Infrastructure 3 in that it provides services that let customers dynamically manage virtual machines. The company isn’t willing to name many of its customers, but it says its software has been shipping since last year. (Virtual Iron was a Network World 2005 start-up to watch.)

Still, enterprise IT buyers need to be cautious, says Gordon Haff, an analyst with Illuminata. “As far as the competition goes, there remain a lot of promises out there. When it comes to native virtualization, and the kind of services [VMware is] offering . . . there is really nothing that compares today.

"Nevertheless, enterprise IT execs should keep close tabs on the direction VMware and its rivals are taking, analysts say. “It’s great for customers to have a lot of choices, but the flip side is that more choices requires more homework,” Pund-IT’s King says.

Setting the standard

Ironically, one of VMware’s priority projects ultimately will ease the decision-making process for enterprise buyers — or at least remove the risk of vendor lock-in. Last summer, it began working with industry members including AMD, Cisco, Dell, HP and IBM to create virtualization standards. The work is progressing, though Greene admits the companies haven’t reached a consensus.

VMware is focusing its standards efforts in three areas: the virtual machine file format, which affects how machines are patched and backed up; the interface between operating systems and hypervisors, which would remove lock-in between them; and management interfaces that would result in a common approach to virtual machine management. “This is about freedom of choice,” Greene says. For customers, standards will make the choice “really about function, quality and price,” she adds.

Enterprise IT executives are encouraged by the standards prospect. “If we have a standard [virtual machine] container, then it would run if I’m deploying to an environment that has Xen or Microsoft or VMware,” says Eric Kuzmack, IT architect at news conglomerate Gannett, in McLean, Va. “If I had a VM standard, I could worry less about the hypervisor itself and more about the management capabilities.” (See “Gannett dishes on VMware.”) Now, IT shops using ESX Server, Virtual Server or Xen are basically locked into those vendors’ products. “The whole purpose of standards is to not lock me in. He who has the best management tools should win,” he says.

Twists and turns

VMware is attempting to woo enterprise buyers in other ways, too. For example, it made its low-end GSX Server a free product earlier this year, renaming it VMware Server in February. Microsoft followed suit, in April making Virtual Server available for free download. Xen, an open source project, also is free.

The freebies reduce the financial risk associated with trying out virtualization and should encourage more companies to get their feet wet, analysts say. “And for VMware, not only does the company have a greater reputation, they also have products to step up to after the free download,” Pund-IT’s King says.

Users have downloaded hundreds of thousands of VMware Server instances, Greene says. She isn’t yet clear, however, on the percentage of users who move up into ESX Server.

In March VMware began offering virtual appliances, preconfigured virtual machines including an application and operating system. Today it offers more than 100 virtual appliances, which span everything from network management to directory servers and development platforms. The virtual appliances can be downloaded for free from VMware’s Web site and run on any VMware platform, including the free VMware Server.

Really, this is nothing more than your basic cross-selling and upselling. As Greene says: “We want to make it as easy as possible for people to get going on virtualization because we see that when our customers use our stuff . . . they pretty quickly deploy it across the board.”

Next: Managing the virtual realm >

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Copyright © 2006 IDG Communications, Inc.