Assessing the top five virtualization vendors is like ranking NFL teams this year. There’s the New England Patriots and everyone else. Sure, the Colts, Cowboys and Packers look good, but no one else is close to New England’s level.
The same is true with virtualization. There is VMware and the rest of the pack. Big players like Microsoft, Sun and Oracle have started making their moves, and open-source alternatives are being offered by Citrix, Novell and Red Hat. Additionally, interesting things are happening with startups. Even so, at this point the virtualization game is dominated by VMware.
With that in mind, here are our top five virtualization vendors:
Palo Alto, CA
Why it’s in the top five: Depending which analyst report you read, VMware owns anywhere from 55-85% of the virtualization market. The size of the market itself is in dispute, but the consensus is that server virtualization has a strong foothold in the enterprise and will continue to grow. IDC predicts that the market for virtual machine software licenses alone will grow from about $1 billion today to more than $3 billion by 2010. Those numbers don’t account for nascent markets for desktop virtualization, virtual appliances, and virtualization services. According to Matt Healey, senior research analyst at IDC, the virtualization services market will expand to a nearly $12 billion market in 2011.
VMware is in a good position to maintain its leadership status. Revenues for FY2006 were $704 million, generated from a customer base of over 20,000 organizations, which includes 100% of the Fortune 100 and 90% of the Fortune 1000. Meanwhile, when parent company EMC spun out 10% of its stake in VMware last summer, the IPO netted about $1.7 billion – nearly twice what was anticipated.
| Virtualization Services Market, 2007-2011 Forecast
What to watch for in 2008: Will VMware expand beyond the server market to other virtualization opportunities, and will they capitalize on the need for services?
In recent years, virtualization has been about one thing and one thing only: server consolidation. “Now that we’ve containerized our servers and made them portable across hardware platforms, the next real phase is data center automation,” said Chris Wolf, senior analyst, Burton Group. Further down the road, Wolf noted that virtualization has the potential to bring on-demand workload automation and high-availability infrastructures together, which, in turn, could help bring grid computing to the mainstream.
In the near term, something simple like being able to move virtualized systems off of a hardware platform needing maintenance is a boon for IT.
“IT doesn’t need to do server maintenance in the middle of the night anymore. You can move the virtual servers and do the work during normal business hours. Quality of life for IT improves greatly,” Wolf said.
VMware has been out ahead of these trends. The company recently lined up agreements with leading server vendors, including Dell and HP, to embed ESX Server directly on motherboards. The embedded hypervisor gives the company a foundation for further data center automation offerings, while its VMotion product allows IT to migrate virtual machines from one physical server to another (or one storage system to another) with no disruption or downtime. Not only is IT’s life easier, but end users don’t see any downtime at all.
Finally, SAP announced early this month that its enterprise applications will be fully compatible with ESX Servers. “The effects of this deal won’t be felt immediately,” said Gary Chen, senior analyst, enterprise, Yankee Group. “It will take some time for SAP customers to start migrating to virtual environments, but the stamp of approval from SAP is a big deal.”
Fort Lauderdale, FL
Why it’s in the top five: Six months ago, Citrix wouldn’t have even been in the virtualization conversation. At the same time, XenSource was a niche player offering an open-source alternative to VMware. All that changed when Citrix entered the virtualization game through its $500 million acquisition of XenSource this past August.
The acquisition made Citrix a serious virtualization contender, while giving XenSource the corporate backing and sales channel needed to make a real push for enterprise customers.
“Citrix has a lot of other products that fit well with virtualization, such as a desktop play and a web acceleration offering,” Chen said. The Xen kernel will remain open source, and that kernel has broad validation in the open-source community. Virtual Iron, Novell, and Red Hat all base their offerings on the Xen kernel.
XenSource added proprietary layers on top of the kernel, which was part of why Citrix went the acquisition route rather than developing their own in-house Xen-based offering. “Citrix was not traditionally an open-source vendor,” Chen said. “Dealing with that community will be a challenge, but having the XenSource team on board will ease the learning curve.”
What to watch for in 2008: Will Citrix/XenSource be able to carve out a decent niche in the virtualization market? The company has a fraction of the market share of VMware, and Xen has been confined mostly to small and mid-tier open-source projects.
The good news is that the company signed its 1,000th customer in Q3. Clearly, the Citrix acquisition made an impact, since XenSource had only just signed up its 500th customer in Q2. New XenSource customers include Carsdirect.com, Cornell University, Miami Herald, Microsoft, Polycom, Postini, Raytheon and Sleek Networks.
| Virtualization Services Market, 2007-2011 Forecast
Listing Microsoft as a customer is odd, since Microsoft competes in this space. Microsoft won’t be an open-source player, obviously, but the fact that Microsoft is listed as a customer and not a partner should give conspiracy theorists something to puzzle out.
Microsoft’s release of Viridian in 2008 means that Citrix’s hold on the number-two position is tenuous. Citrix plans to deliver its XenDesktop product in 2008, giving them options beyond the server. However, the market for desktop virtualization has yet to materialize.
Why it’s in the top five: Because it’s Microsoft. By most accounts, Microsoft’s current virtualization offering, Virtual Server, is a dud. According to IDC, Virtual Server has captured a scant 7% market share.
“What they offer now isn’t that impressive,” Wolf said. “Their next-generation virtualization platform has nothing from Virtual Server carried over. It’s a completely new architecture. The fact that they started over from scratch is telling.”
Chen from the Yankee Group agreed. “Virtual Server is a stop-gap product. It doesn’t come close to other offerings. What it does, though, is buy them time. 2008 is when they’ll be competitive.”
What to watch for in 2008: Viridian. Will it deliver as promised, or will its release, as with some previous Microsoft products, be delayed indefinitely? This past May, Microsoft admitted that it had missed some performance goals with the Viridian ramp up, but soon thereafter it released a beta version of the product (as Windows Server 2008 Hyper-V Beta).
“Feature for feature, Viridian won’t stack up to VMware,” Wolf said. “The advantage Microsoft will have is centralization management – not only of server virtualization but of application virtualization.”
In the near-term, Microsoft won’t try to compete feature for feature with VMware. “What they’ll say is that we’re good enough for a lot of use cases. It’s also cheaper and offers good management. For many users, that will be a winning combination,” Wolf added.
In addition, while Viridian won’t be as robust as the offerings from VMware or Citrix, Microsoft will be able to leverage its channel and Windows.
Why it’s in the top five: Somebody had to come in at the number four slot, so why not Novell? The truth is that the virtualization market is dominated by VMware. Neither Citrix nor Microsoft has captured even 10% of the market, and everyone below them is a niche player at best. Discussing the four and five positions is more of a prediction about what could happen in coming years, rather than an assessment of what’s going on today.
What to watch for in 2008: Will Novell gain any traction in the virtualization market? Novell is firmly entrenched in the open-source camp, so its principal competition is with Citrix, rather than VMware or Microsoft, which are both Novell partners. Since the Novell offering leverages Xen, it’s all about what happens above the kernel level.
Virtualization is part of Novell’s larger data-center strategy, and part of that strategy is the support for heterogeneous environments. This is not uncommon, with most vendors supporting Linux and Windows side by side. Novell throws NetWare into the mix, which doesn’t seem like much but is a signal that Novell intends to support broad heterogeneous environments, not just Windows and Linux.
“What Novell has is a number of good partnerships,” Wolf said. “They’ve also been aggressive with upcoming virtualization technologies, and Novell has quietly achieved some of the virtualization platform milestones.” For instance, Novell was the first vendor to integrate Xen into a Linux distribution (rather than as a separate hypervisor).
| Virtualization Services Market, 2007-2011 Forecast
Redwood Shores, CA
Why it’s in the top five: Read this same category for Novell and substitute “Oracle” for “Novell.” The same holds true. Wolf from the Burton Group said that he would have put Sun Sun in this spot, but it’s really a toss up.
“Technologically, the Sun Solaris containers have reached a pretty good maturity point. Long-term, they’re moving into the Xen space with XVM, and they’ve already partnered with Microsoft, so there will be a good exchange of device drivers.”
Wolf noted that Oracle is more of a vendor to pay attention to down the road, but the fact is that the same is true of Sun. Why Oracle, then? Basically, because their approach is different from other virtualization vendors.
It’s a dubious, odd approach, but it’s worth taking a look at. Oracle’s influence on the virtualization space may be more about how they prod their competitors than what they actually deliver, but it’s still worth keeping an eye on.
What to watch for in 2008: Will Oracle’s release of its own hypervisor, Oracle VM, prompt VMware to go back to basics and start singing the praises of its own hypervisor again? Lately, there’s been a growing notion that the hypervisor is a commodity.
“When you peel back the technologies and look at how they work, say between VMware and Xen, they don’t have equal features,” Wolf said. “There is value in the hypervisor. I think you’ll see VMware start reminding people of that soon.” Chen from the Yankee Group is dismissive of Oracle’s virtualization play. “They do have their own hypervisor, true. It’s Xen-based and not much different than any other Xen-based hypervisor – except for the fact that it only runs Oracle. This doesn’t make sense to me. If I were a customer, I wouldn’t touch it.”
Wolf is more forgiving. He argues that having another hypervisor to choose from is a good thing, and many Oracle customers will like the idea of having a one-stop shop for Oracle applications, operating system (Oracle Enterprise Linux) and virtualization.
However, don’t expect a lot of traction anytime soon. The adoption of OVM will likely mirror that of Oracle Enterprise Linux, which isn’t exactly setting the world on fire. “No one is going out and buying OEL and running a file server on it,” Wolf said. “If they buy OEL, they’re just doing it to run Oracle database applications. OVM will probably follow that same path.”