VMware Tightens Its Stranglehold, but Competitors Are Still Breathing

VMworld took place this week, and, boy, did it produce some headlines. Of course, the most important news to come out of the show was more than just product announcements. Virtualization vendor VMware laid out its plan to become the most important part of the data center, and unless Microsoft, Citrix — or perhaps even Oracle — do something drastic, it might just succeed.

More than half of new servers in 2009 will be virtualized, compared with 30 percent in 2008, according to a new survey by TheInfoPro. In the first quarter of this year, more than half of new x86 hypervisor licenses were for VMware, which is on top of the overwhelming percentage of VMware servers currently out there. Only 10 percent of respondents said they are considering abandoning VMware, whereas the vast majority of users foresee the company continuing to play a role in their operations for the next few years.

And why wouldn’t businesses choose VMware? The company is doing more than simply rolling out new products — it is creating never-before-seen options for customers. With its vCloud initiative, for example, customers can build their own dynamic data centers running VMware’s vSphere and vCenter product families, and then automatically migrate applications to external service providers as needed. This is especially good news for companies that want to leverage cloud computing but are afraid of being locked into a particular cloud: Customers can utilize any of the 1,000-plus clouds which already are “VMware Virtualized,” as well as any cloud that has adopted VMware’s newly released vCloud API. Yes, they still are locked into VMware, but it might be worth it for that level of flexibility in the cloud.

As anyone paying attention to IT over the past few years has noted, however, VMware’s ecosystem of partners extends far beyond cloud computing and its newly available API. The company has an ever-expanding list of partners across the data center (including nearly every storage vendor), and VMware comprises one-third of Cisco’s Unified Computing System. At VMworld, VMware announced even more technology partnerships, including HP Insight Control for VMware vCenter. This solution lets users manage their VMware and physical HP servers through the VMware console. Earlier this month, VMware acquired SpringSource and its Java application platform, which could help bring more Java apps into virtualized environments. Indeed, using VMware is becoming easier and more beneficial than ever before.

So, what can stop VMware from becoming the Microsoft of virtualization? Ironically, Microsoft, Citrix and Red Hat — and perhaps Oracle. TheInfoPro’s survey indicates that 24 percent of the new servers virtualized in early 2009 were Hyper-V, and 30 percent of respondents said they intend to implement hypervisors other than VMware ESX. Perhaps a desire for interoperability eventually will drive users to Citrix XenServer (which is free) and Microsoft Hyper-V, which are designed to work with each other and with both vendors’ management software. XenServer 5.5 even has a feature that allows users to run VMware ESX VMs stored in the Open Virtualization Format to run as native Xen VMs.

Citrix also has its own cloud solutions, including C3 and the new Xen Cloud Platform — an open-source software stack upon which cloud providers can standardize. Two of the biggest clouds around, Amazon EC2 and Rackspace Cloud Servers, are built on Xen.

Red Hat could blunt further VMware penetration with the combination of its KVM hypervisor and cloud- and Java-optimized JBoss Enterprise Application Platform 5.0. With its own hypervisor and software, as well as the substantial IP it acquired from Sun and Virtual Iron, Oracle has the potential to make some serious virtualization moves, too.

VMware may have cornered the virtualization market for now, but if it loosens its stranglehold even a little, it looks like Microsoft & Co. have enough life left to make it a fight again.

Question of the week

Is there any real competition for VMware in the virtualized data center?
Relevant analyst in cloud computing
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