Microsoft has attained near-parity with VMware in hypervisor functionality and is ahead in basic cloud offerings, writes Consultant and Wikibon Analyst Scott Lowe in “An Analysis of the Microsoft vs VMware Landscape.” While VMware continues to dominate the market, Microsoft is eating into that lead and clearly has ambitions to replace VMware as the leading hypervisor provider.

Hyper-V has essentially pulled even with vSphere in features, according to Lowe – to the point that both companies have resorted to nit picking the opposition in unimportant areas to try to establish technical differentiation. Lowe contends that the one area where VMware still has a clear lead is ease-of-use and support. Creating a vSphere cluster is a matter of a few clicks, and VMware’s documentation and community support for those who have problems is far superior to what Hyper-V offers at present.

Pricing and Cloud Services

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Lowe says pricing depends on what the client needs, but that Hyper-V is less expensive than the full vSphere Enterprise Edition. However, not everyone needs the full edition; smaller editions are less expensive, although with fewer features than Hyper-V, which only has one version. On the other hand, Microsoft offers generous discounts for some market segments such as education, which VMware so far has not matched. Additionally, because Microsoft bundles Hyper-V with System Center, it is free to many existing Microsoft customers.

Microsoft has a clear lead in cloud options, Lowe writes. Azure offers both a PaaS and IaaS option, the latter providing a place where Hyper-V users can run their VMs in the cloud, supporting customer hybrid cloud services. It also has SaaS versions of several of its leading products, starting with Office 365. By comparison VMware has only IaaS aimed at supporting hybrid clouds based on vSphere.  Of course the 800 pound gorilla here is AWS.

VMware on the other hand holds the lead in the virtualization ecosystem, but this is changing as more vendors add Hyper-V support for their products. Vendors will continue to favor vSphere, however, because of its market share and platform dominance.

Lowe advises CIOs to carefully examine their needs to determine which platform makes the most sense or whether they want to take a dual vendor approach.

Hypervisor commoditization

What Lowe doesn’t look at but is strongly implied in his analysis is that the hypervisor market is quickly reaching commoditization. That happens when a technology becomes clearly defined and vendors can no longer compete on features. At that point market share becomes dependent on user lock-in and, in competitive situations, price. Lowe’s analysis of the near equality of features between vSphere and Hyper-V strongly suggests that the hypervisor market is approaching that point.

When it does, the question becomes, How easy it is for customers to switch to a lower priced alternative? And at that point open systems start taking over the market. That is exactly what we are seeing with Linux, which after 20 years of development is becoming ubiquitous on servers and even mainframes. Today the main

The coming year may well see Microsoft and VMware start a “race to the bottom” in pricing for market dominance. A price war would work in Microsoft’s favor, since it has historically been giving away Hyper-V in any case, and it could simply continue to bundle Hyper-V into the server version of Windows. However, other vendors, such as IBM and HP, may not be happy depending on Microsoft for their hypervisor, and the large number of Linux users may also prefer an open source alternative. Today, that option is KVM (Kernel-based Machine), which Wikipedia defines as “a virtualization infrastructure for the Linux kernel, which turns it into a hypervisor.” According to KVM,  the solution can run both Linux and Windows VMs. A 2013 Wikibon study of the prevalence and growth of server virtualization authored by Wikibon CTO David Floyer highlights KVM’s growth over the prior 18 months (2012 to mid-2013): “196% on a very small base, with most of the growth coming from outside of enterprise IT (VARs, cloud service providers, etc.).”

This sounds a great deal like Linux in its early years, when it was used primarily in specialized environments. Today Linux is mainstream and part of the standard offerings of major vendors, including IBM’s System Z mainframes. If server hypervisor technology is reaching maturity, then KVM or another Open Source hypervisor may start playing a larger role in the marketplace.