As Base Virtualization Market Growth Slows, VMware Eyes New Opportunities

With the vast majority of data centers worldwide already at least partially virtualized, and competition in the base hypervisor market growing, the halcyon days of hypergrowth may be over for VMware. However, say Wikibon Analysts Stuart Miniman and David Floyer in a trio of new Professional Alerts, that does not mean that VMware will stop growing or lose significant market share in the foreseeable future.

VMware’s original stronghold in test & dev is under attack today from lower-priced alternatives, including AWS and free hypervisors such as KVM and RHEV, Miniman says in “Market Leader Under Attack: VMware”. After a dozen years of development, Microsoft’s Hyper-V 3 has become a solid competitive offering as a core hypervisor. And even while VMware is trying to virtualize the remaining IT infrastructure, Platform-as-a-Service and hyperscale environments are creating environments where virtualization does not provide advantages. The latter is the province of only a very small number of companies and large government agencies, but they make 20%-30% of all hardware purchases.

As EMC’s Pat Gelsinger, a former Intel executive, takes over from the ex-Microsoft trio of Maritz, Nielsen, and Egan, Miniman writes, the company may shift from the Windows playbook to something closer to Intel’s, with its focus moving to building a rich support structure around its hypervisor rather than adding features to the core hypervisor, itself. “Like Intel, VMware’s success requires a strong ecosystem,” he writes. “Intel has a strong track record of sucking functionality into its solution without losing its partners; VMware needs to follow a similar path.”

VMware is well positioned, he writes, to take advantage of at least three new trends:

  1. Converged infrastructure, which has virtualization as a core tenant,
  2. The “Post PC” world of mobile and virtual desktops, which is becoming closely associated with virtual desktop infrastructures, and,
  3. Expansion from server virtualization to a full software-led data center architecture incorporating technologies from its recent acquisitions of DynamicOps, Nicira, and Virsto.

Beyond Server Virtualization

The Virsto purchase adds a vital piece to this picture writes Wikibon CTO David Floyer in “VMware Agrees to Acquire Virsto to Facilitate Software-led Infrastructure”. The Virsto Storage Hypervisor provides a virtualized storage layer below the VMware Hypervisor for Servers, with its own file system that allows a one-to-one connection between VM IO queues and target storage objects. Benefits include reduction of IO latency, improved bandwidth for IO, and support for an end-to-end performance dashboard by VM. It also eliminates LUNs and creates a simpler VMware storage construct managed by VMware. And it supports storage functions such as snapshots, clones, & thin provisioning as system-wide software functions rather than storage array functions. And for SMB resellers and their customers, it provides the same functions as storage arrays using DAS and JBOD.

Where VMware really shines, and the reason that it’s “enviable market share” is not under threat, however, is not the core hypervisor but the increasing environment of management functionality VMware is building around it, Floyer writes in “VMware Virtualization is a Set of Management Products, not a Feature”. This is only emphasized by VMware’s announcement of vSphere with Operations Management and vSphere Data Protection Advanced 

coincidentally the same day Floyer published this Professional Alert. These include:

  • Data center & cloud infrastructure management (vSphere, vCloud Director),
  • Infrastructure and operations management (vCenter),
  • Security (vShield),
  • Application management (vCenter AppSpeed & Application Discovery Manager),
  • Desktop & end-user computing (View and supporting applications), and,
  • The VMware application platform (vFabric).

VMware is working toward creation of a base for software managed infrastructure that is hardware-agnostic and will run on commodity hardware. This will support a much more unified IT infrastructure than is possible today with the present generation of hardware-based management tools for servers, networks, and storage.

As with all Wikibon research, these Professional Alerts are available free of charge on the Wikibon Web site. Interested professionals are invited to join the Wikibon community by registering on the site, which allows them to edit and comment on research and post their own pieces. It also gets them e-mail invitations to Peer Incite meetings ,at which their peers present on their experiences solving real-world problems with advanced technologies.