The virtualisation market is in a bit of turmoil at the moment, shaken up by the prospect of billions of dollars of revenue -- and the fact that a big chunk of the market leader, VMware, is about to be sold off. Effectively, it's an IPO whose hype factor is reminiscent of the bad old, good old days of the late 1990s.
Other virtualisation vendors are seeing this as an opportunity -- especially virtualisation vendor Virtual Iron (VI). "We're encouraged," says VI's marketing manager Mike Grandinetti. "It means new attention and visibility to server virtualisation market and it means the financial community is paying attention. Wall Street wants to understand the market, and the financial press is covering it. It all increases the demand."
So why do we care? Virtualisation vendors smelling opportunity are likely to be in customer acquisition mode. And vendors in that phase of their development offer the keenest prices, as any fule kno.
Among them is VI, which started in 2003, and is one of the few companies providing virtualisation software that competes head-on with VMware, rather than allying itself and being part of the gorilla's "eco-system", as so dozens of others have done.
VI argues that VMware's visibility brings it opportunities. In particular, its message is that it's providing similar functionality to VMware's flagship ESX Server product at one-fifth of the cost. VI, whose virtualisation hypervisor is based on the open source Xen technology, describes itself as: "a VMware alternative for a growing number of companies". Quoting researcher Forrester's numbers, VI reckons that VMware has "penetrated about five to seven per cent of the potential market, largely due to their high cost and the complexity of their solution."
For VI, that means there's plenty left over, given that market researcher IDC reckons that businesses will be spending over $15 billion on virtualisation technology by 2009.
And VI marketing manager Mike Grandinetti believes that penetration rates of virtualisation technology are still very low. For example, he says that: "SMEs are not adopting virtualisation because VMware's too expensive cost of software and infrastructure.
"This means there's an opportunity to get into companies large and small. The market will quickly shift with attach rates at around 50 per cent so most will be virtualised, and there'll be high penetration rates."
Grandinetti's confident about his company's chances -- as you'd expect. "Today's regulations means that companies have to draw up shortlists, which means we can gain sales alongside VMware -- we're usually one of two or three other companies highlighted," he says.
Insisting that his company's pitch is not about low price but about value and performance, Grandinetti tries to play down one of VMware's greatest strengths, its cloud of satellite vendors who support its products.
"VMware's ambitions grow and contribute to [parent company] EMC's bottom line. This means they end up adding capabilities that results in VMware competing with its partners. Some those ex-partners now would rather work with VI and get into projects with us," he says.
As examples, he cites PlateSpin, whose main play is as a vendor of software that allows you to convert physical servers into virtual ones. "Now," says Grandinetti, "VMware Capacity Planner competes with PlateSpin's PowerConvert so PlateSpin is now working with us.
"Also Provision Networks - VMware bought [virtual desktop provider] Propero for its client brokering technology, so more partners found themselves needing other sources of business. So we and Provision Networks are proving virtual desktop infrastructure technology. Again, VMware bought Akimbi so more partners need to look elsewhere."
For the future, Grandinetti reckons that VMware's market share will diminish, as does that of all early market leaders.
He's ready to poo-poo Microsoft's entry into the market too, a move that's due next year. "Microsoft's first release is always sub-optimal, but the second and third releases are better and are more likely to see broader adoption," he says.
"Microsoft's roadmap is very ambitious but their focus is only on managing Microsoft infrastructure," Grandinetti said. "By the time Viridian [Microsoft's hypervisor technology] arrives, millions more virtual servers will have been deployed and that means a heterogeneous infrastructure. There will be increasing focus on interoperability, so we need to help bring Linux and Windows together."
Grandinetti admitted that VMware's customers are better served in some areas, in particular because VMware's products run on processors without hardware assistance, such as Intel's VT, which gives the VMware product users a wider choice of hardware platform.
"Also," Grandinetti concedes, "They support more OSes and flavours of Linux and Win Server than us. We want to focus on the most popular OSes and we won't compete with VMware on that front."
As a demolition job on VMware and on Microsoft, Grandinetti's outpourings are hard to refute. However, VI is not the only non-VMware player in the market. Virtuozzo and its offshoot Parallels have been making headline headway in recent months, so VI has competition to deal with.
But as he points out, right now there's plenty of room for everyone -- until, that is, virtualisation becomes one of those invisible technologies that's swallowed up into the OS. With Microsoft arriving at the virtualisation station soon, the time when that happens cannot be far away. After that, it's a whole different ball game.
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