The Early Returns - VMware Slipping To Hyper-V. Prediction On Track

VMware vs. Microsoft. Not everyone agreed with me in the Network World pole that VMware would lose to Hyper-V. I believe about 55% said VMware would win out against Microsoft, which was the opposite of how I felt the battle would come out. Well the early returns from the front lines as reported by Jon Brodkin show VMware isn't down and out but they have stumbled. The story below the fold is that Parallels, not just Hyper-V, has been doing very well too. Here's the meat of what Jon reported about the market share returns.

In the second quarter of 2008, VMware's virtualization revenue market share was 78%, down from 86% in the previous year's second quarter and identical to its share in this year's first quarter. Meanwhile, VMware's share of new shipments was 44% in the second quarter, down from 51% the previous year but up from 42% in the first quarter of 2008.

Microsoft captured 23% of new shipments with Hyper-V and Virtual Server 2005, up from 20% last year and from 18% in this year's first quarter. But Microsoft's revenue share is a paltry 1.1% of the x86 market, says IDC analyst Brett Waldman, who notes that the second quarter was the first in which Microsoft shipped a paid product.

Parallels' Virtuozzo product secured 16% of the second-quarter revenue, good for second place behind VMware, Waldman said.

Far be it for me to call the race over but I still stand by my prediction that Hyper-V, along with other winners like Xen and Parallels, will enjoy the spoils from knocking VMware off it's industry leader pedestal.

Despite new management, VMware still seems to be in the same tailspin. I've already made all my arguments of why Hyper-V will win in my previous blog post. Let's hear why you think I'm wrong, why you agree with me, or if you see an alternative outcome.

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Copyright © 2008 IDG Communications, Inc.

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