In a young market like the virtualization one competitors are few and a single acquisition can determine niche balances for years.
And this is exactly what’s happening: just 1 month ago Microsoft announced the acquisition of Softricity, one of 2 big protagonists in application virtualization, and this Friday VMware announced the acquisition of Akimbi Systems, leader in the virtual infrastructures automation.
Both have been critical moves.
Now that Microsoft is going to release enhanced Terminal Services with Windows codename Longhorn, eroding some Citrix market shares, the company hoped to maintain a competitive position moving towards application virtualization and streaming with an upcoming project codenamed Tarpoon, but the acquisition of Softricity could frustrate this plan.
At the same time Microsoft anticipated a possible move of actual server virtualization market leader, VMware, to expand its area of interest: it’s not impossible VMware, already counting on EMC Corporation storage virtualization capabilities, would also start offering application virtualization technologies, assembling one piece after another for the grid computing leap.
On the other side VMware achieved a big strike acquiring this week Akimbi because its product, Slingshot,wasn’t just complementary and highly desirable in a VMware infrastructure, but was also a notable solution for Microsoft Virtual Server customers.
In the Redmond point of view Akimbi technologies could have been a perfect add-on for upcoming Windows Server Virtualization and Virtual Machine Manager. Now the opportunity is gone.
The definitive niche order would now depend on a handful of promising startups. Among them 2 are particularly interesting: PlateSpin and vizioncore.
The first one, PlateSpin, started its business improving at its maximum the first operation of a virtualization project: migration of existing servers in the virtual infrastructure (something we usually call Physical to Virtual migration or P2V). An area where both virtualization leaders are not shining and need to severely improve (Microsoft in particular).
The company is even more desirable now that launched a second tool, PowerRecon, addressing the earlier, most critical problem of virtualization adoption: capacity planning.
The second one, vizioncore, completely focused its offering on a crucial aspect of virtualization, disaster recovery, providing virtual machines hot backup capabilities and replication to VMware infrastructures. Something virtualization customers ask aloud since beginning.
Since Virtual Server 2005 R2 already has host clustering features and it’s going to obtain VMs hot backup with upcoming Service Pack 1, it’s unlikely the company could be interesting for Microsoft.
A less compelling interest could be generated by SWsoft, the actual leader in OS partitioning.
At WinHEC 2006 Microsoft expressed its interest also in this virtualization approach but said we’ll not see anything concrete until after Windows Server Virtualization launch. Before that time, we are talking about 2009, Microsoft could decide it’s more convenient to grab SWsoft and its established market share than starting from scratch.
What customers gains from these movements? Not that good.
At first sight acquisitions seems to lead to an overall improvement of biggest companies offering, with all features out-of-the-box, but this trend can severely stomp newcomers, like Parallels, hardly able to enter the market to engage a features-competition race.
And even founding the opportunity, market leaders would simply apply an aggressive pricing, preventing the large majority of customers from looking around for something more than what’s in the box.
A situation easily leading to a R&D slowdown and all other problems of any monopolistic market.