Virtualization penetration has surpassed 50% of all server workloads, and continues to grow. The competitive market for x86 server virtualization infrastructure has matured, leading more enterprises to reconsider their choices, and, instead, consider multiple virtualization infrastructures.
The x86 server virtualization infrastructure market includes all x86-based workloads (i.e., application, Web and database servers; hosted virtual desktops [HVDs]; file, print and security servers) deployed on standard x86-based physical servers.
Solutions for this market leverage:
- Hypervisors to create virtual machines (VMs)
- Shared OS virtualization technologies (also called “containers”)
- Server virtualization administrative management (base frameworks)
- Server virtualization embedded management (live migration and basic automation of administrative management functions)
Not included are higher-level management functions, such as operational automation tools that deal with virtual resources, application performance tools that leverage and monitor virtualization, disaster recovery tools that leverage virtualization, desktop provisioning and brokering software, etc.
Citrix is leveraging its position in desktop virtualization and new focus on cloud computing infrastructures to grow its foothold in the server virtualization market as the third-place vendor in terms of market share. Unlike VMware and Microsoft, Citrix’s server virtualization business is driven almost entirely by its strength in desktop virtualization. The HVD opportunity now accounts for more than one-third of x86 server virtualization infrastructure VMs. Citrix XenDesktop is the leading desktop virtualization solution in the market, and the majority of its HVDs are hosted on XenServer. XenServer tends to be the desktop virtualization host of choice for smaller enterprises that use XenDesktop. This market is not without competition. VMware is the primary desktop virtualization host, and Microsoft is a growing factor.
- Rich product capabilities for relatively low cost (starting with the free-of-charge XenServer edition)
- Large opportunity in the cloud service provider market that relies heavily on open-source Xen today
- Bundling of XenServer with other Citrix products, and ability to leverage its desktop virtualization market position and installed base for XenServer sales
- Very large and loyal channel
- XenServer marketing execution and reach
- Open-source software (OSS)-based competition (especially from Red Hat RHEV and KVM)
- Continued market and strategy complexity in its partnership with Microsoft (specifically with respect to XenServer)
Microsoft has been in the market with Hyper-V and System Center Virtual Machine Manager (VMM) for four years. There have been three major deliverables in that time: (1) Hyper-V (and System Center 2008) in mid-2008, (2) Live Migration and Cluster Shared Volumes in Windows Server 2008 R2 and System Center 2008 R2 in late 2009, and (3) Dynamic Memory in Windows Server 2008 R2 Server Pack 1 (SP1) and System Center 2008 R2 SP1 in early 2011 (important for HVD deployments). Microsoft has not updated Hyper-V in the past year, but a major release — Windows Server 2012 — is expected in late 2012. System Center 2012 VMM was released in April 2012, but too late for evaluation in this research.
- Administrative environment that is familiar to Windows administrators
- Installed base of Windows, especially a large number of Windows-only enterprises
- Strength of solution for midsize enterprises and low price
- Company financial strength
- Difficulty converting or surrounding a strong VMware installed base, especially in large enterprises
- Competing with VMware for channel and service provider influence
- Relatively slow cadence of delivery of enhancements (major release every four years)
VMware has maintained its strong functionality lead with the introduction of vSphere 5.0 in 2011, including a new high-availability architecture and increased scalability. VMware continues to have dominant market share, and customers remain satisfied with product capabilities and vendor support. However, concern over vendor lock-in is increasing. Also, VMware’s pricing change toward virtual memory entitlements has raised concerns about pricing model volatility and pricing disparity between VMware and the competition. There has been growing interest during the past year in competitive evaluations and creating a separate virtualization footprint with a different technology — typically Microsoft Hyper-V, although Oracle VM use is also growing among VMware customers. However, Gartner sees very few actual customer conversions from VMware at this point.
- Virtualization strategy and road map that lead to private and hybrid cloud computing
- Technology leadership and innovation
- High customer satisfaction
- Large installed base (especially among large enterprises), and a large and growing number of service providers using vSphere (enabling choice of service providers)
- Business model depends on vSphere revenue to expand and invest in adjacent markets
- Maintaining high revenue growth in a more product- and price-competitive market that is already 50% penetrated
- Focused homogeneous virtualization vision in a market where customers are concerned about lock-in, and service providers want differentiation
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