How big is Microsoft threat to VMware?
The talk of this year's VMworld conference in Las Vegas was how much of a competitive threat Microsoft, which weeks earlier announced the free release of its hypervisor product, will prove to virtualization leader VMware.
The theme behind Microsoft's push into the virtualization market, as exemplified by guerrilla marketing campaigns at the VMworld event, is that it can offer much of VMware's basic capabilities at a fraction of the price.
The software giant is giving away its Hyper-V hypervisor product to any purchasers of Windows 2003 or 2008 server editions. It's an offer that hasn't gone unnoticed by end users.
Michael Tran, chief technology officer at Digital Sense, a new data center operator, has been considering both the Microsoft and VMware paths, visiting Microsoft in Seattle six weeks ago and VMware this week in Las Vegas.
He had some positive things to say about Microsoft's entry into the market.
"Microsoft's main pitch is that anyone with Windows could have the hypervisor for free, so the net cost of the software is zero," he said. "Anything else is going to look expensive against it."
The Microsoft product "is very cost-effective for smaller organizations and very powerful," Tran told ZDNet.com.au. "It's probably not up to the same level as VMware on many aspects, but then again it has some things that are ahead. Hyper-V is, for example, extremely easy to deploy."
Is price important?
VMware CEO and president Paul Maritz says he is not particularly concerned about competing with Microsoft on price. The price of software is important, he said, "but only up to a point."
"We are in a competitive market, we can't charge whatever we would like," he told ZDNet.com.au on the sidelines of VMworld. "Every software vendor has to deal with the reality of competition. It comes from direct competitors and it comes from the open source movement."
"One of the fabulous things about the open-source movement is that they are the ultimate enforcer of fair pricing. If you don't evolve, they will clone your software, and take away your value."
Such a threat, Maritz says, motivates commercial vendors to "constantly renew their value proposition" with new features.
"We have to make sure that what we offer really offers value for money, and that changes over time," he said. "VMware won't sit still. We have new functionality coming, we're going to double-down our bets, we're going to go in some places fundamentally (in the case of the virtual data center operating system) where Microsoft is uncomfortable going."
Serguei Beloussov, CEO of Parallels Software, competes in some markets with both Microsoft and VMware.
"I don't see VMware losing sales to Microsoft because Microsoft is cheaper," he told ZDNet.com.au, adding most large customers look beyond the cost of individual components when determining price.
"For them, the total cost of ownership is important, the cost of the virtualization software itself is only a small portion of all of it."
IBRS analyst Kevin McIsaac agrees. He says the price argument is "misunderstood."
"VMware has a lot of advanced functionality for optimising memory and getting more out of a processor," he said. "If the VMware software is a bit more expensive, but is more efficient and means less hardware to solve the overall problem, it in conceivable that as a total cost of ownership it might actually prove to be cheaper."
"Rather than looking at the cost of the hypervisor, you have to say, if I were to run my set of applications on VMware or run it on Microsoft, what would the total cost of all the hardware, the software and the storage be?"
Tran balks at VMware's pricing at times, but in building a large-scale data center, he believes the potential return on investment from virtualization technology cancels such costs out.
Bogomil Balkansky, senior director of product marketing at VMware, says most VMware customers see a return on investment within six to nine months. "Our experience so far has been that customers are generating so much value for customers that price is not a major objection in our sales cycle," he says.
Two distinct markets
McIsaac says on a feature-function basis, Microsoft's hypervisor "does not compare" with the market leaders.
"It's not as proven to be robust, not as proven to be as scalable, it doesn't have live migration," he said. For that reason, he expects VMware to continue to appeal to the upper end of the market: service providers and large businesses, while Microsoft's price proposition will appeal to smaller businesses.
"The two will have an interesting battle space," Tran agreed. "For a lot of smaller players, VMware will be out of their reach, whereas Microsoft Hyper-V will be in reach. Hyper-V will have its uses in smaller organizations that can't afford enterprise-class storage systems and blade servers and the like," he continues.
"But for enterprise clients, clients that are looking for the best level of support, redundancy and maintenance, VMware have definitely got it. At that level of enterprise-class infrastructure, when you're talking blade servers and fiber channel storage arrays and iSCSI products, really the (virtualization) software is not that expensive."
The verdict
Beloussov expects Microsoft to gain ground on VMware over time. "Microsoft will have a full platform for virtualization," he said. "Maybe it will take two years, maybe five years. But it's going to happen."
But McIsaac still has his bets on VMware.
"VMware will still win out," he said. "There will be some very Microsoft-orientated shops that will say, we like the Microsoft vision, we want to go down that track. But for most organizations today, VMware's is the right strategy to pursue." Maritz meanwhile, is trying his best to sound unconcerned.
"If you look at what Microsoft announced last week, what they have basically said is that VMware has exactly the right list of features, we're going to knock 'em off one by one, we're gonna sell them to you at half the price, and we'll have them ready for you in two years time," he said.
"If we (as VMware) can't make hay with that, we don't deserve to be in business."
Another executive leaves
Meanwhile, VMware said Friday that Paul Chan, senior executive in charge of product development at the software maker, is leaving the company. That marks the latest in a recent string of executive departures.
On September 9, the company announced the resignation of its chief scientist, Mendel Rosenblum. A co-founder of the company, he is also the husband of co-founder Diane Greene, who was replaced as chief executive in July.
And on September 2, VMware disclosed that its top executive for product development, Executive Vice President for Research and Development Richard Sarwal, had less than a year left after being recruited away by Oracle.
Brett Winterford reported for ZDNet Australia.
Reuters contributed to this report.
The idea that someone would want to run a VM inside windows is a ludicrous notion and only the truly clueless will be attracted to it. If you are running a server with lots of VM's and the base OS is only there to support the VM's, why slow everything down with MS crap?
Like everything else MS has tried in the past few years, this shows how hopelessly out of touch they are. Running around shouting 'me too' without understanding the reasoning behind it and the inability to properly implement is precisely why MS is losing ground and is completely irrelevant to the march of progress.
This is as much competition to VMWare as the zune is to the iPod.
linux + vmware < windows server + their crap VM.
I see you still have no reading comprehension. The comment is about MS as a whole, not in a single market. MS is losing ground absolutely everywhere which is why they are desperately trying to break into new markets(VM, supercomputers(which themselves are dropping in favor of clusters, which overwhelmingly run Linux).
It is not rhetoric to say MS is in decline and irrelevant. That is simple fact.
Yes, please remember that The_Decider's rants are all on his religious holy war against all things Microsoft. He has no actual facts or reason behind his comments other than his pure unadulterated hatred and bigotry.
You're right, it's pretty typical for him.
That said, ESX is very light and VERY fast. It has a very nice pile of tools that make managing a virtual cluster very easy. Hyper-V can't even do full clustering yet (judging by actual tests, by colleagues at Intel no less).
When/if Hyper-V gets the same kind of tools and the same performance, then maybe it'll be a threat. Otherwise I see more people using Xen at this point.
Sure, whatever. Record sales, record profits. Even Vista outsells everything but XP, by a HUGE margin.
What a joke. I don't know what world you live in, but it has nothing to do with reality.
Just ask Netscape. Or Novel.
They are irrelevant because Vista is a bad copy of Linux and OSX. Followers are never relevant.
No facts? Just because you get a weekly talking points memo from the shill department and can't form your own opinion doesn't mean the rest of us are the same way. Your time would be better spent on actually learning about computers.
This is a bloated system that is overpriced and no one with a brain will use because 100% free(as in freedom and beer) solutions that perform better then this pile of crap. VMWare is years ahead of this crap as well. Again, this is another me-too solution searching for a problem.
This is like MS's futile attempts to beat Google and the iPod.
"No facts? Just because you get a weekly talking points memo from the shill department and can't form your own opinion doesn't mean the rest of us are the same way. Your time would be better spent on actually learning about computers."
And yet when people ask you to list the facts to back up your claims, you never seem to respond. Interesting.
I might refer you to some very wise advice that you would do well to take to heart:
"Your time would be better spent on actually learning about computers."
Eventually they will have enough people on board that care only about price and not quality that they will be a force in the end.
What a shame.
"Most are slowly moving away from them. "
Okay, I'll take you up on that challenge. Most means more than 50% of every company / business on the planet. Please list those companies that have converted. Please be thorough and document your sources. As there are millions of businesses on the planet, I expect you'll be busy contacting all of them for the information, but unless you want to look like an uninformed troll, then you have no choice but to defend your comments.
Please list these companies. All of them. Or face ridicule and mockery earned by your comments.
With very few exception nearly every big company is slowly adding another solutions at the expense of MS. That means they are moving away from MS.
"With very few exception nearly every big company is slowly adding another solutions at the expense of MS. That means they are moving away from MS."
When asked to present your facts, you fail to give them, instead hiding behind generalities without any backing of actual fact or data. If the only information you give is made up by you, then that doesn't say much for your validity.
In the future, please use real information instead of making it up. You will look less like a troll.
No worries - Xen is $0.00, and has more capabilities. Hyper-V can;t even hold up in an enterprise environment (yet - this may change).
Also, enterprise customers are under different parameters than the users of, say, a web browser. If the boss spent tends of thousands of bucks getting and installing a VMWare-based solution, what makes you think s/he's simply going to cast aside all that investment in a solution that isn't nearly as capable and doesn't have even the smallest of comparable toolkits? From a sysadmin perspective, even if Hyper-V was all that and a bag of chips, there's no justification for simply tossing out all the investment without one hell of a return.
Linux had similar problems when it first showed up - then it got the tools to complement it (Apache, MySQL, etc), and the benefits became large enough to justify phasing it in as new projects arose, and as old projects got replaced.
@ Vegaman Dan: Err, you do know that...
* HP is looking to add an alternative OS entirely in their lineup.
* Dell is selling Ubuntu machines to consumers and has openly pined for a chance to sell OSX preinstalls.
* Acer sells laptops preloaded with Linux or simply "naked".
* IBM slapped Microsoft in the face 8 years ago and began selling/marketing Linux as its main OS of choice.
* Asus sells Linux preloaded on the majority of the Eee models they've sold.
10 years ago, none of these folks (including IBM) would even think of doing that for fear that MSFT would retaliate. Now they do it openly. That pretty much defines "moving away" to most folks...
This is about servers, where MS only leads in exploits.
The biggest barrier of entry for Virtualisation at the entreprise level (that's where the money is. VMWare and MS are not interested in your home Virtual servers, at least, not at the moment) is that VMWare software costs a lot of money. While running costs vis a vis savings are attractive, there is a fairly steep set-up cost that needs to be paid.
While there is a free VMWare Server, it missing too many of the key entreprise features to even evaluate the benefits of virtualisation.
MS's free hypervisor could fit into this niche nicely. It offers enterprises a look into the door FOC. Once they are hooked, and it looks like it works, you better believe they will start asking if they should even bother to pay money for a product, even if there are more features which they might/might not use or it looks prettier.
I can see the huge potential of V-Hype
Free (as in beer) is nice, but Xen is free (as in both beer and speech), and gives me better performance to boot. This is probably why the article should have read Xen as the competitor instead of VMWare, truth be told...
@strevoir: the Guest OS is irrelevant. I use quite a number of Windows servers on top of VMWare ESX and Xen. Each (Hyper-V and ESX) has a 'management' OS. ESX' uses Linux (but you can do nearly all of your management through a client-side GUI toolkit, or you can ssh into it), which keeps out of the way. Hyper-V uses a Windows OS (which you pretty much have to use either at the console or with Remote Desktop).
@kksing: In regards to "While there is a free VMWare Server, it missing too many of the key entreprise features to even evaluate the benefits of virtualisation."
Problem is, Hyper-V is missing them too - in its full product. This may change, but I wouldn;t bet the farm on it.
Also, Netscape is a bad parallel - Web Browsers are $0.00 - VM tech usually means that the client has invested tens of thousands of dollars (and often way more if it's a big installation), and isn't about to simply chuck it all out the window on a whim.
/P
- by brenalexd September 22, 2008 12:47 PM PDT
- The one thing that everyone here seems to be forgetting is that VMWare not only offers its VMware Server product for free, but also offers its ESXi hypervisor for free. This is the same proven, robust hypervisor that the VI3 platform is built on. So the argument that Microsoft addresses a market segment that VMware does not is completely inaccurate. Also, let's be honest here, Hyper-V is not free, you must purchase a Windows Server license in order to get it. VMware offers a TRULY free hypervisor, not to mention one that is way more robust and proven than Hyper-V. If anyone out there is interested in "a look into the door FOC" then go download ESXi from VMware. Even without the advanced features of VI3, ESXi alone has capabilities Hyper-V can't touch. Bottom line, is do a little research, don't fall victim to the smoke a mirrors act that Microsoft is so very good at.
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