"What, me worry?" is the signature phrase of Mad Magazine's Alfred E. Neuman. It probably also sums up VMware's reaction to Gartner's latest assessment of the server virtualization market.
VMware dominates this market, and it's long been the only leader, as defined by one of Gartner's famous Magic Quadrants. But the latest Magic Quadrant for x86 Server Virtualization Infrastructure report, published last week, adds Microsoft and Citrix to the coveted top-right Leaders section.
Microsoft (NASDAQ: MSFT) and Citrix (NASDAQ: CTXS) are, in other words, catching up with VMware's virtualization technology. "Although market share leader VMware (NYSE: VMW) continues to set the standard in products and the pace in terms of strategy, Microsoft has increased its market share (especially among midmarket customers new to virtualization), and Citrix is leveraging its desktop virtualization strengths and its free XenServer offering to expand its server virtualization share," says the report.
It's no surprise that competition has heated up -- everyone wants a share of the server virtualization bonanza. Right now, about 40 percent of x86 architecture workloads have been virtualized, and the installed base is expected to grow by 500 percent from 2010 to 2015 as the number of workloads grows and virtualization levels reach more than 75 percent, Gartner (NYSE:IT)reckons.
But VMware doesn't to be worried by all this because it's playing the same game Apple perfected with its iPhone and iPod products. That game involves defining a market, waiting until competitors are about to catch up and then redefining the market by forging ahead -- the classic tactic of ensuring victory by moving the goalposts. (Anyone remember Microsoft's Zune? It was a credible competitor to Apple's original iPods, but it looked obsolete almost as soon as it was introduced because Apple launched the touchscreen-equipped, app-capable iPod Touch.)
What's happened in the server virtualization market is that Microsoft's Hyper-V is now becoming a credible alternative to VMware for bog standard server virtualization in mid-market or branch office deployments -- thanks in part to the inclusion of important embedded server virtualization management technologies like Live Migration (equivalent to VMware's vMotion) and a credible management tool in System Center Virtual Machine Manager. It has the additional benefit of being lower cost than VMware, although Gartner points out that its low price is also a weakness when it comes to influencing the channel to promote Hyper-V rather than VMware.
And let's not forget Citrix, which also offers what Gartner regards as rich product capabilities for relatively low cost (or even for free).
Even so, VMware is still doing well. Gartner said the company "seems to be winning at least 60 percent of new midmarket customers -- in large part due to a well-structured channel, but also due to strong mind share developed over the past 10 years."
But that's not the reason VMware isn't worried.
No, the reason is that VMware has moved the goalposts from old-fashioned server virtualization, and it is now busy talking about the cloud. More to the point, it's actually delivering an entire enterprise hybrid cloud solution.
Sure, Citrix announced Project Olympus, a commercial offering of the OpenStack cloud platform, although there's not much to show for all the talk yet. And Gartner points out that in the past year Microsoft has begun to lay out a broader virtualization roadmap for cloud computing, including Hyper-V Cloud, which includes some technology, white papers, consulting services and partnerships.
But VMware has been working on this for a couple of years already. For the private cloud, its software stack includes its hypervisor, vSphere and vCenter for resource management, vShield and vCenter Configuration Manager for security and compliance, vCloud Director for catalog-based service delivery and vCenter Chargeback and vCloud Request Manager for service approval and metering. Bridging the gap to the public cloud, VMware offers its vCloud API and its free vCloud Connector plugin, which enables the management of virtual machines running in a public cloud from within vCenter. Enterprises today have an increasing number of vCloud public cloud service providers to which they can move their clouds.
Citrix and Microsoft have good technology and credible roadmaps, so they will no doubt both get to where VMware is now -- perhaps even quite soon. But by then the company will most likely have moved the goalposts again. Alfred E. Neuman has no reason to worry. Nor does VMware.
Paul Rubens is a journalist based in Marlow on Thames, England. He has been programming, tinkering and generally sitting in front of computer screens since his first encounter with a DEC PDP-11 in 1979.