Virtualization Market: MSFT Gaining on VMware?

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Many technology areas are still hurting due to the long-running recession. However, one area that appears to be a harbinger of good news is virtualization, according to a new report.

That’s good news, not only for established virtualization market leaders like VMware (NYSE: VMW) and Citrix (NASDAQ: CTXS), but newcomers like Microsoft (NASDAQ: MSFT), as well.

The report, by Information Technology Intelligence Corp. (ITIC), surveyed 700 corporations worldwide and found that server virtualization deployments “have remained strong throughout the ongoing 2009 economic downturn.”

ITIC principal analyst Laura DiDio conducted the independent survey in May, June and August. The report results were released Thursday.

Among its conclusions are that Microsoft, despite a late start in most virtualization markets, is becoming the come-from-behind favorite, at least in the area of application virtualization.

“Thanks to the summer release of the new Hyper-V with live migration capabilities, with Hyper-V 2.0, Microsoft has substantially closed the feature/performance gap between itself and VMware’s ESX Server,” the report states.

Another top level take away for Microsoft: “Three out of five — 59 percent of the survey respondents — indicated their intent to deploy Hyper-V 2.0 within the next 12 to 18 months.”

“With Hyper-V, Microsoft has a very credible, competitive offering,” DiDio told InternetNews.com. “Hypervisors, in general, have been commoditized” due to Microsoft’s commodity approach to virtualization.

That doesn’t mean, however, that Microsoft will have the whole pie.

For instance, Citrix is the market leader in desktop virtualization with a 19 percent market share.

In the same market, Microsoft holds a 15 percent share and VMware has 8 percent.

We have just begun to virtualize

To put that in perspective, though, more than 60 percent of corporations haven’t begun virtualizing their desktop environments yet.

Meanwhile, VMware remains the market leader in server virtualization with approximately 50 percent share among enterprise users, the report says. Microsoft trails in server virtualization with 26 percent market share.

“The first wave [of adopters] went with VMware’s ESX Server, and for good reason, because they were the only company out there,” DiDio said.

In the area of application virtualization, Microsoft leads with a 15 percent share. In the same market, Citrix holds 11 percent, with VMware following with 7 percent. Tempering those numbers however, “nearly two-thirds of businesses have not yet deployed application virtualization,” the report says.

Additionally, while the market is still in growth mode, it’s not boiling down to a winner-takes-all card game, DiDio added.

“Forty percent of survey respondents say ‘We are going to be using virtualization products from multiple vendors,’ so a win for Microsoft is not necessarily a loss for VMware,” she said.

Article courtesy of InternetNews.com.