VMware Users Open to More Competition

Rivals pushing virtualization vendor to be more aggressive, IT execs say

LOS ANGELES -- VMware’s dominance of the server virtualization market faces increasing threats from Microsoft Corp. and open-source rivals. Proof of that was in evidence last week at VMware Inc.’s own user conference, where competitors had booths and Microsoft’s virtualization software was tucked into the backpacks handed out to attendees.

Although some users were surprised by VMware’s display of openness to its rivals at VMworld 2006, the competition is needed, according to attendees such as David Freed, a senior systems analyst for the Los Angeles city government’s finance department.

As a result of the competitive pressure, VMware is “getting much quicker at releasing upgrades,” said Freed, who also thinks rival offerings are forcing VMware to be more aggressive about dropping prices and adding features. “Competition is doing a good thing for [users],” he said.

VMworld drew about 7,000 attendees, and users and analysts at the conference agreed that VMware is well ahead of its competitors in offering x86 virtualization software with sophisticated functionality. But that doesn’t mean corporate IT managers are ignoring alternatives to the EMC Corp. subsidiary’s products.

Robert Hopps, an IT manager at Safeco Corp., spoke at VMworld about the Seattle-based insurer’s deployment of VMware technology for disaster recovery purposes within its IT operation, which includes about 1,600 servers.

“We like VMware. It’s definitely meeting our needs right now,” Hopps said after his talk. But Hopps added that he will remain “tool-agnostic” and continue to evaluate rival products against VMware’s.

Nicholas Biggestaff, a Unix systems administrator at the University of Missouri’s main campus in Columbia, said he also likes VMware’s software. But he’s willing to consider XenSource Inc.’s open-source technology, which he said has annual support costs that are only about one-third as much as what VMware charges. “It’s cheap enough that it’s worth looking at,” Biggestaff said.

Genex Services Inc., a medical management firm in Wayne, Pa., is piloting VMware’s tools in advance of a server consolidation project scheduled for next year.

“Microsoft is going to want to compete, and so is XenSource,” said Dennis Robinson, a technical infrastructure manager at Genex. “Right now, it doesn’t look like they can.”

Nonetheless, Robinson said he plans to “do a little bit of a bake-off” between VMware and Microsoft before a final purchase decision is made.

Gartner Inc. analyst Carl Claunch said that VMware’s future revenue growth will come from virtualization management and configuration tools — not from the runtime hypervisor that provides the underlying virtualization.

VMware’s approach, Claunch said, is to “build this momentum around virtualization — even if some of it’s from Xen and [Microsoft’s] Virtual Server — and get control of configuration and management, the part where the money is in the enterprise.”

Jay Haskins, a systems engineer at Holland America Line Inc. in Seattle, said the cruise line has a very good reason to consider virtualization: The amount of space for servers on board a ship is limited.

Holland America is testing VMware’s software, Haskins said. But he also stopped by XenSource’s booth last week. Asked about VMware’s decision to allow its competitors to display their wares, Haskins grinned and said it was a good thing “because you can at least have other options.”

Copyright © 2006 IDG Communications, Inc.

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