During Gartner Symposium/ITxpo outlook for the server virtualization market, Gartner dropped two very interesting numbers on the audience.
The first was that only 16% of the workloads worldwide are running in virtual machines today. This is a far lower number than has been suggested by any number of other sources. Gartner went on to predict however that by the end of 2012 (a scant three years from now) that 50% of the x86 architecture workloads representing 58 million deployed machines will be running in virtual machines. For a the complete announcement see the Gartner news release.
Gartner also went on to say that by the end of 2010 (next year), enterprises with 100-199 employees will have a higher penetration of virtual machines than the Global 500.
The combination of the low penetration of virtualization today and the projected rapid growth (Gartner is known for being very conservative in its growth estimates so these should be taken more seriously than the average forecast), leads to several interesting observations about vendor and enterprise IT strategies with respect to virtualization:
- It is still very early. There is still plenty of time left for companies that compete with VMware on the virtualization platform front (Microsoft, Citrix and Red Hat) to establish strong market share positions. The entire SMB market is up for grabs as is over half of the large enterprise market.
- We are past the “evangelize the concept” stage in the evolution of the market. For the next three years, success will come from delivering the desired functionality at acceptable price points in easily consumable solutions to buyers who know what they want.
- Despite VMware’s significant lead in the Global 2000 accounts, the SMB market appears to be Microsoft’s to lose. The reasons for this are primarily that Microsoft is going to make virtualization cheap and easy, and that most of these SMB accounts already have Windows admin expertise, and do not have Linux/VMware admin expertise.
- As we have written about before, VMware needs to decide how aggressively to emphasize the management stack for its virtualization platform vs. pursuing further market share gains for its virtualization platform. Based upon the low penetration numbers quoted by Gartner it would seem that VMware would be well served to bring the platform fight to Microsoft on all fronts and not just focus on building out a management stack for its existing position with the ESX/vSphere platform.
- As Microsoft gains share both in the SMB and within some enterprises, a cross-platform management opportunity will open up for the vendors in the existing VMware ecosystem. Security vendors, performance vendors, and management vendors will all benefit from positioning themselves across both (or multiple) management platforms.
If the market plays out as indicated above, enterprises will need to carefully decide if they want to stick with just VMware as their sole virtualization platform. Enterprises will also need to decide if they want to go with VMware’s evolving management stack, or assemble best of breed solutions from the third party ecosystem that work across multiple virtualization platforms.