Continued from part one, published yesterday.
An evolving market
Focusing on the management aspect of virtualisation ultimately could push VMware into competition with partners, such as HP and IBM, analysts say. But VMware says its goals are more focused.
"I really don't categorise what we're moving into as management," says Diane Greene, who founded VMware in 1998 and now serves as its president, as well as executive vice president of EMC, which acquired VMware in 2004. "We're retooling the system infrastructure services, which is slightly different from management," she says.
In other words, VMware is zeroing in on the virtualisation layer to create a more flexible, highly available and manageable framework. "It's utility computing made real and working," she says.
Greene doesn't see VMware butting heads with the larger systems-management vendors, but she says Microsoft could be a serious contender. For now, Microsoft's Virtual Server is still in its infancy, and the software giant doesn't have plans to ship a hypervisor until 2007 or 2008. A virtualisation management package, code-named Carmine, also is a way off. Still, enterprise IT executives are starting to look at Microsoft for server virtualisation.
According to a recent Forrester survey of 51 IT decision-makers, 73 percent are either using or looking at VMware, and 65 percent are considering Microsoft (multiple responses were allowed).
With Microsoft's large installed base, "VMware will need to clearly identify how it is different from Microsoft and why customers should stay with a third-party provider," says Clay Ryder, president of research firm Sageza. "VMware needs to be clearly different to overcome a Microsoft onslaught.
"Microsoft might not be VMware's only threat. Analyst firms estimate just five percent of x86 servers are virtualised today, meaning a huge, untapped market is there for the taking. Other server virtualisation companies, such as SWsoft, Virtual Iron and XenSource, could start chipping away at VMware's market share.
"A lot of companies are trying to catch up" with VMware, says Daniel Burtenshaw, senior systems engineer at University Health Care in Salt Lake City. "I've tested other products, and VMware is ahead. But as those other products mature, it will help put the pressure on VMware to make its products just a little bit better.
"Already, competing products are beginning to gain a foothold. Virtual Iron, which uses the Xen hypervisor, in June announced its software had been tested and proven in production on IBM servers.
Virtual Iron's software is similar to VMware Infrastructure 3 in that it provides services that let customers dynamically manage virtual machines. The company isn't willing to name many of its customers, but it says its software has been shipping since last year. (Virtual Iron was a Network World 2005 start-up to watch.)
Still, enterprise IT buyers need to be cautious, says Gordon Haff, an analyst with Illuminata. "As far as the competition goes, there remain a lot of promises out there. When it comes to native virtualisation, and the kind of services [VMware is] offering . . . there is really nothing that compares today.
"Nevertheless, enterprise IT execs should keep close tabs on the direction VMware and its rivals are taking, analysts say. "It's great for customers to have a lot of choices, but the flip side is that more choices require more homework," Pund-IT's King says.
Setting the standard
Ironically, one of VMware's priority projects ultimately will ease the decision-making process for enterprise buyers -- or at least remove the risk of vendor lock-in. Last summer, it began working with industry members including AMD, Cisco, Dell, HP and IBM to create virtualisation standards. The work is progressing, though Greene admits the companies haven't reached a consensus.
VMware is focusing its standards efforts in three areas: the virtual machine file format, which affects how machines are patched and backed up; the interface between operating systems and hypervisors, which would remove lock-in between them; and management interfaces that would result in a common approach to virtual machine management. "This is about freedom of choice," Greene says. For customers, standards will make the choice "really about function, quality and price," she adds.
Enterprise IT executives are encouraged by the standards prospect. "If we have a standard [virtual machine] container, then it would run if I'm deploying to an environment that has Xen or Microsoft or VMware," says Eric Kuzmack, IT architect at news conglomerate Gannett. "If I had a VM standard, I could worry less about the hypervisor itself and more about the management capabilities." (See "Gannett dishes on VMware.") Now, IT shops using ESX Server, Virtual Server or Xen are basically locked into those vendors' products. "The whole purpose of standards is to not lock me in. He who has the best management tools should win," he says.
Twists and turns
VMware is attempting to woo enterprise buyers in other ways too. For example, it made its low-end GSX Server a free product earlier this year, renaming it VMware Server in February. Microsoft followed suit, in April making Virtual Server available for free download. Xen, an open source project, also is free.
The freebies reduce the financial risk associated with trying out virtualisation and should encourage more companies to get their feet wet, analysts say. "And for VMware, not only does the company have a greater reputation, they also have products to step up to after the free download," Pund-IT's King says.
Users have downloaded hundreds of thousands of VMware Server instances, Greene says. She isn't yet clear, however, on the percentage of users who move up into ESX Server.
In March VMware began offering virtual appliances, preconfigured virtual machines including an application and operating system. Today it offers more than 100 virtual appliances, which span everything from network management to directory servers and development platforms. The virtual appliances can be downloaded for free from VMware's website and run on any VMware platform, including the free VMware Server.
Really, this is nothing more than your basic cross-selling and upselling. As Greene says: "We want to make it as easy as possible for people to get going on virtualisation because we see that when our customers use our stuff, they pretty quickly deploy it across the board."