VMware, IDC play virtualization hardball

Virtualization company VMware has publicly disputed the way in which key research into the virtualization market was undertaken by analysts IDC, and disputed figures that appear to show a rapid growth by a competitive product from Microsoft.

According to the IDC research published last week, Microsoft has done well in virtualization since the launch of its hypervisor, Hyper-V.

In "its first quarter of general availability Microsoft Hyper-V delivered a strong showing, and when combined with Virtual Server 2005, Microsoft's market share is 23 percent of new shipments," according to the IDC research note.

Then in a blog posting on Monday, Mike DiPetrillo, a principal systems analyst at VMware, questioned IDC's figures. "So did Hyper-V really ship enough units in two days to get 23 percent market share? I doubt it," DiPetrillo wrote.

The figures have been seized upon by Microsoft and emphasized in the company's corporate blog on Microsoft TechNet. "Customers now have choice in market. VMware is no longer the dominant server virtualization vendor (less than 50 percent [of the market]). Customers now have choices that include Microsoft, Citrix, Sun, Novell, RedHat and Oracle."

The blog post continued: "Microsoft's server virtualization software already has half of VMware's share in the market."

On Thursday, a spokesman for VMware confirmed the company's low opinion of the findings. "IDC says that Hyper-V delivered a strong showing in the first quarter of general availability, but how do they know?" asked Reza Malekzadeh, senior director of products and marketing for VMware in Europe, the Middle East, and Africa. "If you look at when Hyper-V was launched in October it was only on the market officially for a couple of weeks before the end of the quarter. So how do they know it had a strong showing and how did it pick up 23 percent market share in that time?"

IDC reacted strongly to what it called "the confusion and misinformation being sown by the folks at VMware." Spokesman Mike Shirer told CNET News sister site ZDNet UK that "[in] response to some of VM's comments, you'll note that the 23 percent share is the Microsoft share (Virtual Server 2005 + Hyper-V), not Hyper-V share alone." He also emphasized that "we did take into account OEM shipments."

Malekzadeh said the whole process of producing the figures was somehow "different from usual practice" with IDC surveys. "Usually IDC will check the research with the vendors to see if it tallies with their figure, before they publish. It gives you a chance to compare what they are finding with your own research. For some reason, this time it did not happen," said Malekzadeh. "I don't know why."

This was denied by IDC. Brett Waldman, a research analyst in system software at IDC, told ZDNet UK: "The unit shipment tracker is the result of IDC analysis of publically available financial data, interviews with software vendors, and competitors' information cross-checked through IDC demand-side studies. We interviewed 2,500 people in 35 countries, and we asked about production usage, which could have included use of the Hyper-V beta which was available months before the official launch."

When asked whether there had been any difference between this study and previous ones, Waldman said: "It's a biannual study. We did exactly what we did last time."

Asked what the analysts thought had gone wrong in the process, Malekzadeh said he could not say, adding: "I would ask IDC the question: who had sponsored the research?" When pressed on the point, Malekzadeh would not elaborate, but said: "Just ask them."

If the implication was that, in drawing up the figures, IDC had been influenced by Microsoft because the company had paid for the research, the analysts were keen to make it clear this was not the case.

"IDC's Server Virtualization Tracker is not a sponsored product," said Waldman. "It is available on a subscription basis to all IDC clients."

Colin Barker of ZDNet UK reported from London.

[servermaker]

unreal. But par for the course at VMware. Unmatched arrogance. Keep telling it like it is IDC, don't allow these clowns to bully you. "just ask them" hahahahah

[Penguinisto]

From the sysadmin perspective, IDC's figures seem very unusual as well... You almost always see VMWare products in any server room that has any virtualization at all - and no Hyper-V.

Also, if IDC is counting Hyper-V betas and lumping it in with MS Virtual Server 2005 ( a free download product - see for yourself at http://www.microsoft.com/windowsserversystem/virtualserver/default.aspx ), why is IDC not lumping in the free downloads of ESXi and VMWare Server with the Virtual Infrastructure/ESX products?

Also, a few weeks is a very, very short time to suck in 23% marketshare of anything.... so counting Virtual Server 2005 makes sense. That said, Virtual Server 2005 is nowhere near Enterprise-capable (it's an analog of VMWare Server), so what "market" are they talking about?

If it's just "virtualization", then Parallels and Crossover Office would be huge players - and I haven't even mentioned Xen at all, which ships with every download of RedHat Linux-based OS (RHEL, Fedora, et al), and with every new sale of Citrix server products.

I'm thinking IDC has wandered into a thicket of incompetence here... maybe someone at IDC can explain what it is they're calling a "market", and if they counted VMWare's free products like they did MSFT's?

/P

[Penguinisto]

Minor edit: Crossover Office is not a virtualization product... had it confused with win4lin, which is in turn not a big player. My bad on that point.

/P

[mpitogo]

Huh thats interesting. I have to sleep at night I don't know if I can trust hundreds of guests to it yet. I'll stick to EMC/HP/VI3 Ent.

[ValkmanIL]

Very interesting. I do Domino work and the same thing happened in the email space. MS began claiming that more people were using Outlook than Notes simply because they shipped Outlook or Exchange on the same box as their OS. Voila! Mindshare went to Outlook/Exchange because business leaders thought that everyone else was using Outlook. Same thing happened with IE vs Netscape. MS shipped IE with every OS and poof! IE all of the sudden wiped out Netscape because it was there when people got their computers. I do not know of IDC is correct or not but it is pretty eerie how this seems to be playing out again in the VM space but this time with the apparent help of IDC.

It really does not stand to reason that any company can gain 23% of a market in a quarter when there are other very established products in the market.

[SixVodkas]

Microsoft "wins" because Microsoft says that they win, then the news is regurgitation throughout the press.

Nothing new, they've been doing that since their inception.

[edentifier2]

Looking at the press release from IDC, which can be found at :

http://www.idc.com/getdoc.jsp?pid=23571113&containerId=prUS21473108


"VMware grew its x86 server virtualization software business 27% year over year and maintained the number 1 position in the market with 78% revenue share in 2Q08. When looking at new x86 virtualization licenses, VMware continues to hold on to its strong position in the x86 market with a combined market share of VMware ESX and VMware Server at 44%. However, in its first quarter of general availability Microsoft Hyper-V delivered a strong showing, and when combined with Virtual Server 2005, Microsoft?s market share is 23% of new shipments."

I am mildly surprised at VMWares reaction to this report... it does not paint VMWare in a bad light at all, it states it includes their free products such as VMWare Server (and the free Microsoft Virtual Server), but is also stating that similar products are doing well too; and if anything, by throwing their toys out of the pram, VMWare actually gives more weight to the perception amongst customers that they wanted to avoid...

VMWare have very good products - my company uses them for everything from development environments for contractors, through to Test deployments. It makes sense for us, as a high percentage of our customers also use VMWare, and we can receive or send a VM to use for our internal development and acceptance process. But, of course, as a technology company, we also kept a close watch on Hyper-V, from beta through to the new free Hyper-V Server 2008 - and, well, sorry VMWare, but it also works just as well as your products, in the market my company has focused.

The reaction should not to resort to name calling, but differentiate your company by offering, for example, better customer service, better product, etc....

[virtman]

It looks like MS has IDC on its payroll. Looks like MS is more aggressive this time (compared to Domino/Netscape times) to muscle a competitor out of the market. VMware is entrenched in the big corporations, so MS knows it takes more than a free hypervisor to unsettle VMware. So they are trying to get mind-share by opening their wallets big-time -- like influence the CIOs by putting IDC analysts on payroll.

Interesting to see how the virtualization war turns out!