VMware, MS battle over virtualization management

Microsoft: Pricing, physical server expertise attractive

Microsoft may be entering the hypervisor market behind VMware, but the vendor remains a dominant presence in enterprise IT shops, which may ultimately deploy Hyper-V in-house and need ways to manage both vendor environments.

A recent poll conducted at Gartner's Infrastructure, Operations and Management Summit asked about 100 attendees a handful of questions related to VMware's management capabilities and the possibility of using Microsoft tools to manage its competitor's products. About one-third of respondents said VMware needed to work on all areas of its management products including: technology gaps, ease of use and integration, quality and reliability, product support and training, and pricing terms.

In particular, 26 per cent noted the company could improve upon pricing. (See related story, "VMware trumps Hyper-V on functionality, but not on price".)

"The type of buyer the initial Microsoft release will get to is very price-sensitive. These are people who will sacrifice some features and functions to get access to the hypervisor technology at prices lower than what VMware is offering," says Stephen Elliot, research director for IDC's Enterprise Systems Management Software Service. "Microsoft is also touting a differentiator; they understand the physical side of the issue for Windows and will put the two together in one console."

Another poll question conducted by Gartner asked the same attendees if they would consider managing VMware environments with Microsoft products. About one-third of respondents currently using Microsoft System Center tools said they would consider it and another 16 per cent would also look to Microsoft to manage VMware virtual servers for other unstated reasons. The remaining respondents, 15 per cent of which were using System Center, said they would not consider Microsoft. Still, the opportunity is there for Microsoft to infiltrate VMware customers with added management capabilities.

"VMware's focus is of course primarily at the virtualization layer. Administrators, however, may need tools that not only provide insight into the health of the hypervisor, but also provides detailed knowledge of the guest virtual machine as well as the physical hardware that the virtualization technology runs on top of or interacts with [i.e., storage, network and so forth]," Gartner's Haight says.

Small businesses up for grabs

If customers buy management tools from their hypervisor providers, then the vendor with the most market penetration could ultimately have an advantage.

Gartner estimates that 7 per cent of all workloads in 2007 were on x86 virtual servers, nearly all of which can be traced back to VMware. The research firm expects more than 60 per cent of workloads to reside on x86 virtual servers by 2013. According to Gartner, 10 per cent to 15 per cent of large enterprise companies are investing in the technology. In addition, VMware is in 90 per cent of the Fortune 1000, and 1 per cent to 2 per cent of small businesses have started working with the technology.

VMware will be in a good position to continue to sell its management capabilities to existing large customers, but the lack of physical management capabilities previously mentioned could hurt the vendor here. In addition, while VMware has a strong track record winning over big customers, industry watchers say it may have missed its opportunity to penetrate small businesses -- leaving that large opportunity up for grabs by Microsoft.