Mac virtualization software market up 50% in North America

Business users and gamers wanting to run Windows apps, titles said to be driving sales

Shipments of VMware Fusion and Parallels Desktop, the two virtualization software packages that allow Mac owners to run Windows applications, are up 50% so far this year, according to market tracker NPD Group Inc.

The market for the software has exceeded growth in global sales of Mac hardware, which was up 41% year over year in its most recent quarter, according to Apple Inc.

Business users needing to run Windows-only apps such as Microsoft Corp.'s Access or Project, or the latest Office suite, are driving demand, said Michael Redmond, a software analyst at NPD. Gamers who can't find the latest offerings, such as Crysis Warhead or Warhammer Online, for the Mac yet were also pushing up sales.

"Clearly, the performance gains of [Macs] moving to Intel processors are encouraging more users to experiment with virtualization," he said in an e-mail.

"The story through August 2008 of this year is that VMware Fusion has taken off from virtually no sales in the first half of 2007 to now sharing half the retail market with Parallels," Redmond said. Parallels was introduced almost a year earlier.

The two products are now "really neck and neck" in terms of both unit shipments and dollar sales in North America, Redmond said.

According to NPD's figures, which draw from U.S.-based retailers and e-commerce stores, sales of Mac/Windows virtualization software this year will total between $15 million and $20 million.

Parallels says it has sold 1 million copies of Parallels Desktop since June 2006. VMware will only say that it sold 250,000 copies of VMware Fusion in its first five months. Both products list for a suggested retail price of $79.99. They supplement Apple's Boot Camp software by letting Mac owners run both OS X and Windows apps at the same time. Boot Camp requires users to reboot into Windows or Mac.

At its annual VMworld conference on Tuesday, VMware Inc. announced the general availability of Version 2.0 of VMware Fusion.

The upgrade is free to existing users. It includes improved graphics through support of DirectX 9.0 Shader Model 2 for 3-D games, support for up to four CPUs per virtual machine, and the ability for users to virtualize Leopard Server.

Parallels said it will release Parallels Desktop 4.0 in one to two months. A private beta version of Parallels Desktop 4.0 was leaked to the Web earlier this month.

Copyright © 2008 IDG Communications, Inc.

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