With all the eyes in tech watching, the virtualization market resembles a horse race with favorites, dark horses, rivals, and champions vying to capture some glory. Although many channel partners already laid the groundwork of their virtualization practices with VMware or Citrix solutions, there's confidence that Microsoft and its Hyper-V technology featured in Windows Server 2008, as well as the company's larger virtualization strategy, is clearly a contender to bet on.
That's because the virtualization market, still in its infancy, will take time to mature. While vendors such as Microsoft, VMware, Citrix, Novell, Oracle, Red Hat, Sun Microsystems, and Virtual Iron, to name a handful, fine tune their products and pricing to make their case for market share, there's also work to be done to knock down several barriers to entry before virtualization on a mass scale will take hold.
One barrier, for example, is that security and compliance auditors need clarity to effectively audit for compliance in a virtualized environment. While industry experts estimate that 70 to 80 percent of companies have deployed virtualization in some shape or form, the bulk of deployments are in test and development environments only, with a scant percentage of deployments in production environments and even fewer running mission critical applications.
"Business important, yes. Mission critical, no," says Richard Jones, vice president and service director for data center strategies at the Burton Group, noting that there's quite a bit of market left when it comes to virtualization.
Microsoft channel partners agree.
"What we're finding is that a lot of people understand the basics about virtualization but not the details or the true benefits," says Lew Smith, product manager for virtual solutions at InterPhase Systems Inc., a Plymouth Meeting, Pa.-based Microsoft Gold Certified Partner.
In fact, Smith reports that his company unlocks the value of virtualization for its SMB customers through its disaster recovery and business continuity benefits. The product of choice today: VMware.
Smith believes that Microsoft is making a compelling case and its best selling point for Hyper-V by giving it to customers as part and parcel of an upgrade to Windows Server 2008. "At that point, the customer will have Hyper-V, so why not look at it?" he says.
In a couple of years, Smith expects to see a big uptake in Hyper-V versus VMware.
Why? Because Microsoft, like other vendors in the virtualization space, are showing signs of catching up to VMware, the current market leader who for years had little to no competition while it honed its best-in-class product.
Microsoft's strategy, in particular, is to offer competitive end-to-end virtualization architecture -- from data center to desktop -- to top rival VMware.
"If you're looking at virtualization as a compelling architecture, you need to look past the server hypervisor," says Marty Thieret, founding partner at Competitive Computing (C2), a Colchester, Vt.-based Microsoft Certified Gold Partner.
Microsoft, he notes, is gearing up to offer a suite of virtualization products, including Hyper-V, application virtualization, storage virtualization, desktop virtualization, and terminal services or presentation virtualization tied together with Microsoft System Center Virtual Machine Manager (VMM) for management of physical and virtual assets.
"System Center Virtual Machine Manager is the real strong point for Microsoft, giving customers the ability to manage their environment, including hypervisors from Citrix and VMware, from a single interface," says Thieret.
VMM is not only positioned as a vibrant revenue generator for Microsoft but for its channel partners as well, notes Burton's Jones.
Waiting Game
Channel partners seem to agree that Microsoft's greatest hurdle at the moment is becoming the virtualization vendor of choice for enterprise customers.
"They're a little late for the enterprise but right on time for the SMB," says Chase Boles, president of Gray, Tenn.-based Bailey Computing Technologies Inc. (BCTI), a Microsoft Certified Gold Partner.
VMware, the preferred product for many BCTI customers, has the market momentum and advanced features such as VMotion live migration that customers who want virtualization today are willing to pay for, even at a premium.
Even when Microsoft brings its live migration feature to market, the vendor's work won't be done. "The real challenge for vendors in the virtualization market isn't just to win them over. You have to continue to win them over," says Boles.
Microsoft, with its overarching strategy for virtualization, is right on target, he notes, and will ultimately be a strong player in the virtualization area despite having to play catch-up.
In fact, while some view Microsoft as lagging in the virtualization product arena, others see the vendor as setting the stage for grabbing significant market share.
"It takes time for organizations to change out their IT infrastructures," says Jones.
For InterPhase Systems' Smith, there are two key factors putting Microsoft into play for his customers: curiosity about Hyper-V and the eventual need to upgrade to Window Server 2008. Most solution providers report that Window Server 2008 is their server standard.
"We see a lot of companies piloting Hyper-V in preproduction environments and expect to see even more tire kicking in 2009. By 2010 we expect to see a more mature Hyper-V go into production environments," he says.
Finally, there's pricing. The Windows Server 2008 Enterprise License allows customers to run up to four software instances at a time in virtual operating system environments on a server under a single server license.
"Our customers are like, 'Wow, that's a big savings,'" says BCTI's Boles.
Even if his customers aren't ready to adopt Hyper-V today, Microsoft's attractive licensing strategy is helping the channel partner create inroads for bigger sales tomorrow.
"Microsoft aggressive pricing and inclusion of Hyper-V in Windows Server 2008 is creating a grassroots effort to get engineers to load the product and try it. Then when the company is ready to buy, the engineers will recommend what they're familiar with," says Boles.
As customers warm up to Hyper-V and the vendor gets its game on, channel partners are confident that with a few more laps to run, Microsoft is looking very well positioned to cross the finish line for the virtualization market in excellent shape.
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