Gartner Inc.’s latest Magic Quadrant for x86 server virtualization shows that VMware Inc. and Microsoft continue to lead the field by some distance, with the race among the “niche players” to become “number three” by far more interesting.

As things stand, VMware retains its commanding lead, while Microsoft is the only other company to squeeze into the “Leaders” quadrant. VMware stays out in front even without the help of vSphere 6.0, which was not considered in this year’s quadrant due to its late release. Gartner says vSphere 6.0 was released after the cutoff date for its analysis, but it should be noted that Microsoft didn’t release any new products either, with Windows Server 2012 r2 still its main offering.

Despite the success, Gartner wasn’t too rosy about VMware, noting that while it has many strengths it’s still concerned about the high price it demands for its services. Gartner also notes VMware is losing customers to Oracle Corp. due to that company playing hardball on certification. As for Microsoft, it gets better attention, with Gartner saying it’s now able to meet most enterprise’s needs with respect to server virtualization. However, it’s biggest challenge remains to make a dent in a niche that’s still utterly dominated by VMware, and to do so it’s trying to find niches where organizations might prefer using Hyper-V.

“This strategy of ‘second sourcing’ will enable these enterprises to evaluate Hyper-V for further deployments and perhaps leverage the competition in deals with VMware,” Gartner’s analysts note.

The chasing pack

Stepping back from VMware and Microsoft’s tussle for dominance, the race for third place looks far more exciting. For one thing, Gartner points to the cloud-centric nature of Citrix Systems Inc.’s Xen hypervisor, especially when run on top of Amazon Web Services, as a major plus. However, The Register points out Citrix is still just as niche player, with the Xen hypervisor’s popularity being somewhat less than that of OpenStack and KVM, while Citrix’s customers still have to use VMware’s ESX and the underlying hypervisor.

Oracle is another niche player, even though Gartner points to some “good improvements” in its products recently. “Oracle’s push for an Oracle-only stack limits its general market potential,” the analysts said.

As for China’s Huawei Technologies Co. Ltd., it’s main problem is that it’s still, well, Chinese. Gartner says the company’s geopolitical problems (The U.S. government has blacklisted many of its wares) are holding it back from finding markets for its technology. It suggests that Huawei find a deeper and wider sales channel if it wishes to break out from its Asian stronghold.

The prospects for Red Hat Inc. look somewhat better however, and Gartner suggests that if it positions itself as the easy way to do OpenStack, it could one day become the clear number three behind VMware and Microsoft.

“Red Hat needs to successfully promote the idea of the right virtualization stack for the right applications, promote RHEV or Linux Containers, and allow VMware to maintain a position for existing enterprise applications,” Gartner says.

All in all, this year’s quadrant suggests the server virtualization segment remains a very stable one. Neither VMware nor Microsoft look too concerned about losing their market positions, because none of the niche players look capable of mounting a challenge any time soon.

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