Hyper-V could win virtualisation war, say European analysts

In a month that has seen VMware co-founder and CEO Diane Greene fired and replaced by ex-Microsoft man Paul Maritz, the virtualisation war is undoubtedly hotting up. But with a current IDC estimate of 82% of the virtualisation market in Europe, can VMware's dominance really be undermined by Microsoft's Hyper-V offering?

Hyper-V's position will rely on take-up of Windows Server 2008 with which it will be bundled and it is still too early to see how this will play out, agree the analysts.

Forrester VP and principal analyst Frank Gillett says: "We don't have specific data on adoption of Windows Server 2008. Forrester clients are interested in Windows Server 2008 and seem to be following their normal pattern of adopting new OS versions. The mainstream adopts it cautiously as new applications and servers are installed."

Although the analysts are loathe to comment on Windows Server 2008 uptake just yet, they are more forthcoming when it comes to sizing up Hyper-V versus VMware's offerings.

Gillett says: "Hyper-V isn't in general availability yet and may not be until August. It is comparable to ESX Server, but not to VMware Virtual Infrastructure 3 (VI3). The hypervisor by itself is not the real competition – the real competition is between Hyper-V combined with the forthcoming System Center Virtual Machine Manager versus VMware VI3. Microsoft needs to do a better job of talking about all its combined features against VI3 but it will need another product revision to really make VMware sweat."

Roy Illsley, senior research analyst at Butler Group, says: "One of the things that Hyper-V is definitely going to do is go after the SMB sector. If you look at its capabilities, you look at its pricing and everything else about it, Hyper-V is not really enterprise-ready, so it’s not a challenger to VMware now."

Chris Ingle, consulting and research director IDC's systems group, sees things slightly differently. Looking at his own figures, he says: "You’ve got 82 per cent of the sample using VMware’s products of some sort but the interesting thing is that you’ve got quite good adoption in small and medium businesses. I think a lot of people are thinking that Microsoft will look to take that segment. VMware will look to take the large business where they’ve got more complex infrastructure and they’re the ones looking at the VMotion, the live migration stuff, but I'm not sure that’s right. We have seen adoption of VMware already in small businesses and I think we’ll continue to see that."

Both Ingle and Illsley point out that the virtualisation war is not just between Microsoft and VMware. XenSource, now owned by Citrix and which is developing a compatibility layer for the Windows Server 2008 hypervisor, should not be dismissed. "I think you’re going to see more of a Xen, Citrix and Microsoft versus VMware than necessarily a Xen and Citrix versus Microsoft versus VMware," say Ingle.

"Microsoft and Citrix have got quite a nice little link-up," says Illsley. "And XenServer is a good product. It’s not as good as VMware’s product, but when you link it in with Microsoft’s marketing machinery it could be the route into the enterprise sector because Microsoft will get some revenue off the back of it anyway that they can leverage while they’re building up the capability of Hyper-V in the next eighteen months to actually replace it."

So can Hyper-V eventually win the virtualisation war? "Yes," says Gillett. "With Microsoft's next version, which Forrester believes will come by 2010, Microsoft will come much closer to parity, especially for mainstream use. The real question is whether existing VMware customers will still be willing to convert products, or whether they'll want to stick with what they already know."

Ingle says: "I think it’s going to be an interesting one in terms of how you measure success because Hyper-V is with Windows Server 2008 anyway, right? So if you look at the market share of Windows, if you assume that that isn’t going to collapse, which I think is probably a reasonable assumption, then Hyper-V is going to be very strong and at some point will overtake it.

"Now, the point that VMware is making is that they’re doing all sorts of other things with virtualisation that Microsoft’s not doing at the moment. So we need to look at those other uses as well and that’s why I think you get a more complex picture than just saying that you’ll have a winner. I think you’ll have winners and losers in different segments and with different approaches."

"Microsoft and VMware both come out with the same sort of figures which say between about eight and twelve per cent of Windows production servers are currently virtualised, which means there’s a massive market out there yet to be virtualised," says Illsley.

"Given that there’s that massive market out there and given that organisations replace their server architectures in a three-to-five-year time-frame, my view would be let’s see in three years’ time what the landscape’s like. That will give you a good clue as to whether VMware is still going to be a dominant player or whether Hyper-V has won enough support and has got enough of that groundswell to be taken as the leader and probably kill off VMware as an enterprise major player."

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