VMware has a 2-years lead over competitors but will face a harsh price war

Posted by virtualization.info Staff   |   Monday, February 25th, 2008   |  

A new report published this February by the Yankee Group details an evidence: VMware currently has a technology lead over other virtualization players which then will compete on prices.

The analysis recognizes Microsoft, Citrix, Novell, Red Hat and the newcomer Oracle as main challengers, but fail to mention both Virtual Iron and the upcoming Sun, which is heavily investing in virtualization as well.

The Yankee Group expects a harsh bidding war mainly because VMware Infrastructure 3.5 offers less management capabilities than, for example Microsoft System Center Suite, at a higher price.

This depends on the fact that the former only covers virtual machines management, while the latter can spread over virtual and physical servers and desktops.

While this is absolutely true, just a very small portion of the prospects looking for virtualization also wants to replace their existing enterprise managemet solutions.

In most cases a company wants to return on its previous investments and integrate new virtualization consoles with what’s already available. This makes less meaningful a comparison between VMware VI 3.5 and Microsoft System Center Suite.

Obviously, those customers already implementing Microsoft management solutions will look forward to the Hyper-V + System Center Virtual Machine Manager (SCVMM) offering for the reasons mentioned above, but all the others using CA, IBM, HP, etc. will not see the same option as the preferred one.

Another major flaw of the Yankee Group report is related to the security level that VMware products offer compared to the competitors’ ones.

A fundamental lesson that the security industry can teach is that the number of security bulletins doens’t measure the inherent security of a product. Not until it’s directly related with the product’s diffusion on the market at least.

Considering that VMware has about 70% of the market share while Microsoft has above 20% (the analysis reports 30% which is uncorrect), it’s more than expected that the number of discovered security flaws follows this proportion accordingly.

All software in every IT industry is expected to have security flaws, but a straight comparison can be done only when two solutions have the same distribution. In all other cases many factors have to be included in the equation.

Nonetheless VMware will face a more harsh price war in the coming months as the Yankee Group states. But this will not depeding on the thesis above. This will rather depend on the fact that virtualization is slowing reaching the SMB market, where the price point counts much more than the enterprise management features.

Update: The improper comparison between VI 3.5 and SCVMM 2007 was so evident that VMware obtained to put it offline, as The Inquirer reports.

Some time may pass before the Yankee Group publish another analysis about virtualization technologies.



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