Virtual machines, containers, functions. Market knowledge for IT decision makers since 2003
virtualization.info Editors 
Three months after the launch of one of its newest products, vCenter Chargeback, VMware is ready for the first minor update.
The new version 1.0.1 (build 204097) fixes a number of bugs and introduces a few welcome features:
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Last week both VMware and Citrix announced their Q3 2009 earnings.
VMware reported its US revenue in decline for 1% (to $246 million) from Q3 2008. International revenues instead grew 9% (to $244 million) from the same period of 2008.
Services revenues (software maintenance and professional services) increased 33% (to $250 million) from Q3 2008.
Citrix instead reported a global decline of its license revenue for 18% (-15% in EMEA, -5% in APAC and +5% in Americas) from Q3 2009, while the revenue generated from license updates increased 7% for the same period.
Technical service revenue (consulting, training and technical support) increased 20%, while online services revenue (most likely the GoTo product portfolio) increased 21% from Q3 2008.
After last week report and predictions from Gartner, this one is the IDC turn, which reports a very interesting details about the market trends:
…worldwide virtualization software revenue declined 18.7% year over year in 2Q09 to $344 million. Virtualization licenses did grow quarter over quarter in 2Q09. The server virtualization market continues to shift towards the use of paid hypervisors, with paid virtualization software now running on 60.8% of all new server hardware shipments virtualized in 2Q09, an increase over 57.2% in 2Q08…
IDC also adds that 16.5% of all new servers shipped in the second quarter of 2009 were virtualized, an increase from 14.5% in second quarter of 2008. However, actual shipments decreased 21% year over year to 246,000 physical servers in 2Q09.
Last week Gartner released a press announcement disclosing that only 16% of workloads run inside virtual machines.
The analysis firm predicted that this amount is going to reach around 50% by 2012, which is equal to 58 million deployed virtual machines.
Gartner also adds:
…by year-end 2010, enterprises with 100-999 employees will have a higher penetration of virtual machines deployed than the Global 500…
In May 2007 for example Gartner predicted that virtualization will be part of nearly every aspect of IT by 2015.
In April 2008 Gartner also said that 4 million virtual machines were expected by 2009, while we would have 611 million virtualized PCs by 2011.
It’s not clear how to read the new 58 million number considering the previous predictions above.
The virtualization.info Virtualization Industry Predictions page has been updated accordingly.
Citrix is not the only company listening to customers feedbacks. After much debate around the decision to kill the vSphere Enterprise Edition by December 15, VMware decided to keep it, as confirmed by Computerworld.
Those customers coming from VI3.5 were entitled to keep their existing Enterprise license while moving to the new vSphere 4.0 platform. But VMware originally planned to kill this upgrade option by the end of the year.
This way the company probably hoped to accelerate the adoption of vSphere or drive slow customers towards the more expensive (and future rich) Enteprise Plus Edition.
VMware reconsidered its strategy after receiving negative feedbacks (here’s an example).
For sure the decision was made well before the Citrix attempt to lure away VMware customers with the Open Door program as virtualization.info has learned.
virtualization.info has learned that Ron Oglesby, Practice Executive, Global Infrastructure Consulting Services at Dell, left the company last week.
Oglesby is one of the most popular names in the virtualization industry, author of the bestsellers VMware ESX Server 2.5 Advanced Technical Guide and VMware Infrastructure 3 Advanced Technical Design Guide.
He was one of the premiere speakers at our Virtualization Congress 2009 and he appears on virtualization.info from time to time as guest columnist (see his last article here: Is there an optimal adoption curve for server virtualization?).
Rumors report Oglesby as the new Chief Solution Architect at Unidesk (still unconfirmed).
The article virtualization.info published just last week about Citrix joining the The Linux Foundation generated a lot of interest and comments.
Simon Crosby, CTO of Virtualization and Management division at Citrix, personally answered a few readers about the reasons behind the value of a free XenServer and the strategy behind it.
In doing so Crosby disclosed very interesting information. First he claimed that XenServer costs to VMware $300MM per year in lost revenue, probably a Citrix internal projection considering its current market share.
Much more important than that, today Crosby candidly unveiled that Citrix is about to fully open source XenServer.
You read right: the company CTO is not talking about Xen, which is already developed and maintained by the open source community. He’s talking about its commercial implementation, XenServer, where Citrix invested so far, that is offered as a free product since February and that the Burton Group considered as enterprise-ready as VMware ESX.
Here’s his full answer that contains the breaking news:
A couple of weeks ago Citrix announced the newest version of its XenDesktop. While the product is about to deliver interesting features, many customers complained about the new licensing scheme because Citrix moved a concurrent user model to a named user model.
The product is not out yet (the release is planned for November 16) but Citrix, listening to the feedbacks, already changed its pricing strategy.
With an informal announcement on his corporate blog, Sumit Dhawan, Vice President of Product Marketing, describes the new rules:
Yesterday VMware released the first version of its new capacity planning product: vCenter CapacityIQ 1.0 (build 199314).
As the name suggests, the product performs capacity planning on virtual infrastructures, applying continuous what-if analysis to figure out the best arrangement for virtual machines in different scenarios.
It offers reporting and recommendations.
CapacityIQ is made of two components: a vCenter plug-in and a virtual appliance that collects data about the virtual infrastructure in a dedicated database.
Fortisphere is a US startup that launched in November 2007 with a $10M capital provided by venture firms Fairhaven Capital and Globespan Capital Partners.
The company positioned itself as a player in the almost empty VM lifecycle management market segment with the product Virtual Insight 1.0, that was released in January 2008.
In the subsequent months the company has been extremely active in forming alliances, like the one with VMware about VMsafe or the one with RSA, and joining strategic groups, like the Distributed Management Task Force (DMTF) and the Payment Card Industry (PCI) Security Vendor Alliance.
In terms of product development, it didn’t show a significant progress, changing the product name from Virtual Insight to Virtual Essentials Service Manager in September 2008.