VMware is synonymous with x86 server virtualisation. It's the unquestioned market share leader, with between 50 and 80 percent of customers using its hypervisor, depending on who's counting.
But cracks in the armor are starting to appear. Competitors are cropping up all over the place; the behemoth Microsoft is preparing an assault with the upcoming release of Hyper-V. Investors punished VMware for disappointing earnings growth in late January, when VMware stock dropped 34 percent in a single day. Uneasy lies the head that wears a crown, as Bill Shakespeare had it.
"VMware is the champion right now, but everyone's looking to take them down," says Laura DiDio, a Yankee Group analyst.
So if VMware is the major player, who are the competitors? The obvious choice is Microsoft. But it could also be Citrix or Novell, Oracle, Red Hat, Sun or Virtual Iron.
"VMware's biggest vulnerability is pricing," says DiDio, who just published a report on the virtualisation price war.
Less expensive is not always better, but VMware's product retails for about $3,000 (£1,500) per socket, while the other virtualisation vendors typically charge $700 (£350) to $800 (£400), according to DiDio. Microsoft's Hyper-V will cost $28 (£14) as a stand-alone product or come free as an add-on to Windows Server 2008. The EMC-controlled VMware hasn't indicated any possibility of lowering prices, but it does offer one free product called the VMware Server, intended to lure new customers.
A Yankee Group survey last year had 55 percent of server virtualisation customers planning to use VMware, 29 percent opting for Microsoft, 14 percent undecided and the rest buying from one of several other vendors. Some estimates have VMware holding 80 percent of the market or more. (These numbers don't include Unix and mainframe virtualisation, where IBM is a big player).
Microsoft is thought to have the most promising shot at overcoming VMware's huge market lead. But this is a rapidly growing market, and each player has a chance to carve out its own niche while luring customers away from VMware and its flagship ESX Server. Here's a detailed look at what several analysts say are the vendors that pose the biggest threats to VMware.
Gartner analyst Thomas Bittman predicts Microsoft will hold its own vs. VMware, but not necessarily overtake the top spot in the minds of customers. "It's going to come down to VMware being the major enterprise player and Microsoft being the major midmarket player," says Bittman, who is preparing research on the virtualisation market. "The battleground will be primarily between those two. Everyone else is basically a niche player."
Microsoft's proprietary server virtualisation technology is one of three major architectures on the market, along with VMware's and the open source Xen hypervisor. Microsoft's Virtual Server product never really caught on despite having several years on the market, but Redmond officials are taking aim at VMware again with Hyper-V, which is available in beta as part of Windows Server 2008 and is expected to be generally available within five months.