“Now that Microsoft is coming out with their own enterprise virtualization software who’s going to buy VMware products any more?”. How many times have I heard that? Let me first be very clear before you ever start reading this post: I have a Microsoft background and I have built my own career on that. On the other hand I have been working, during the last few years, with VMware and someone might think that I have a “story” with them now. No I don’t have a story with either and I don’t have any direct interest in seeing either one or the other winning over the competitor.
As a background the x86 market has now 3 forms of hardware virtualization. These are:
- VMware hypervisor (ESX – VI3)
- MS Virtual Server (and specifically its future big brother MS Virtualization code named Viridian)
Xen is an open-source hypervisor that taken alone is not very helpful. You can download it off the University of Cambridge web site and start “recompiling the world” to make it work. If you take Xen as a standalone utility this won’t do any good for your business (if you are a student you might have some fun though). That is the reason for which most businesses know Xen under different forms; specifically Xen is now being used as a “line item” in the RedHat and Suse enterprise Linux offerings (since they have integrated it into their distributions, but Xen is also being used as the hypervisor foundation for other OS agnostic virtual infrastructure platforms such as XenSource and VirtualIron. As far as I can see “Xen included in the distributions” is not taking the market by storm and the reasons, in my opinion are:
- Missing management functionalities: this is not Suse and RedHat primary business so what they have done (so far at least) is to add the open-source code and provide a very basic interface to use it (mostly text base)
- Not perceived as an agnostic virtual platform: although it can technically support Windows I don’t see many customers going crazy to install RedHat or Suse Linux to host their Windows servers
- Not clear strategy: Suse and RedHat have just added this to their distributions and they are already talking about adding new open source hypervisors (such as the KVM – Kernel Virtual Machine). While this could be a good strategy for a geek I don’t think that it’s going to interest any “business customer”: they don’t want “the latest cool stuff”, they rather want something stable/solid to run their applications on
And this put XenSource and VirtualIron on the spot. Apparently the idea to bundle Xen with a suite of management tools that are OS agnostic is getting attention in this industry. To make a long story short their strategy is very close to what VMware has been trying to do in the last few years: provide a backbone “value added” virtual server infrastructure capable of running multiple and agnostic workloads. And you can tell they are trying to do what VMware has done ….. have you ever looked at the VirtualIron 3.5 management interface? If you are used to VMware VirtualCenter it will take between 10 and 15 seconds to get used to this GUI. Well maybe more but you get the point.
However, while there is lots of interest in these new solutions, VMware remains king of the hill and they certainly maintain the mindshare for being “the virtualization company”. There is no doubt that both VirtualIron and XenSource will make good strides into this market though. However, looking ahead, with some level of confidence we can say that if Xen is going to make storm-like damages to VMware … MS Viridian, also known as Windows Virtualization will likely have the potential of causing hurricane-like devastations (to VMware).
This is true for a number of reasons…
- …first being that Viridian will be close in terms of performance, architecture and features to VI3 (so in a nutshell nothing to do with the current MS Virtual Server product).
- The other reason is that MS is a marketing machine and despite the fact that the product is good or bad as long as it has the Microsoft label in front of it, it will get LOTS of visibility.
- Last but not least most of these functions will be embedded into the OS costs so the MS value proposition will be “free” or very cheap depending on how they will decide to license some add-on management features.
So will this be the end of VMware? Will VMware be the next Netscape and Windows Virtualization the next Internet Explorer? Who knows? There are however multiple reasons for which this might not be the case.
- Innovation: if you look at what MS will be shipping with Windows Virtualization (officially within 180 days after the release of Longhorn / my take is not before 2H2008) it will be more or less what VMware has been shipping for about 18 months now. We can discuss the details of what MS will have that VMware does not currently have and viceversa but more or less this is the situation. One would expect that by the time MS releases Viridian VMware could potentially leap-frog them again. This of course does not even take into account that this would be a version 1 for MS and they will also have to play catch-up again. This is a market where innovation is going to matter and having a similar product with a 2 years delay is not always going to be a winning situation.
- Add-on values: originally x86 virtualization was really bound to the concept of a hypervisor capable of partitioning the physical server into multiple virtual servers. Nowadays this landscape is changing very fast and it will not take much time before the hypervisor will be considered a “given” whether it’s in the OS, it’s in the hardware, or it’s something in between. In a few years the hypervisor will be enabled on all systems (pretty much like TCP/IP is today) and the real virtualization battle-field will be on the add-on services not on the hypervisor being nice/bad, free/expensive, or that it runs at Ring0, Ring -1 or Ring2. Let’s face it: the hypervisor is draining into the hardware (cpu’s, I/O adapters etc) and the software part that will be above the physical system will be commoditized and standardized anyway. I am pretty sure that within a few years we will laugh thinking about the fact that “we were paying for the hypervisor in 2007″… which is not very different about the fact that I am still laughing because we were paying for the TCP/IP stack in 1995. But that was it at that time.
- Costs: at VMware they are not so stupid. They know they can charge so much (yes VI3 is not cheap) basically because that was the only (real) game in town. As competition becomes fiercer they do understand very well that they need to be competitive. I am not in the VMware marketing organization but if I was I would try to find out an economic exercise that will try to “ponder” my technical advantages Vs the pricing of my competitors. So if my competitors are giving away stuff for free I can’t charge customers 3000$ per server. Perhaps I could charge 500$ per server … because my technical advantages are well worth 500$. It is my impression that today the VMware pricing are not proportional to the technical advantages. The mere fact is that they can afford to super-charge just because the other tools around are not effective (as of today) or just need to be known (such as the Xen-based products that have just started to ship recently). But again … if you are one of those thinking “MS will sunset VMware because they will ship for free what VMware charges a premium for” remember: at VMware they are not stupid.
- Maniacally focused: you need to consider that for Microsoft this is one of the many battle-grounds. Windows Virtualization is a line-item feature in a new OS release. This has nothing to do with the fact that, for them, this is very important or not. It remains a fact that their overall efforts will be diluted across a number of markets that span from OS dominance to databases, from mail systems to development tools etc etc. For VMware this is “THE” market. They are laser focused to provide the best x86 virtualization experience and solutions. That’s what they do and they can afford to run full steam towards that result. Whether they will succeed is another matter but it’s important to notice.
- MS Virtualization is OS-bound: I know, I know you can run Linux on top of Viridian (as you would do with MS Virtual Server after all) but the reality is that Viridian will be a Windows OS role in MS terminology. I am not saying that running Linux on top of Viridian will be like running Windows on top of SUSE / RedHat for a number of reasons: 1) Windows has a larger install base than Linux so it makes more sense to run Linux on top of Windows, 2) MS and SUSE are working to standardize these interfaces and 3) last but not least Microsoft is Microsoft and they can convince you that running Linux on top of their stuff is a good thing (which I am not debating, I think it could be a good thing). Having said this it remains a fact that there will be a conflict of interests (so to speak) for an ISV developing an OS agnostic virtual platform when the same ISV promotes and sells one of these Operating Systems. This doesn’t mean VMware (or any other OS agnostic “virtualization vendor” such as VirtualIron and XenSource) will treat all various OS’es with the same importance and priorities but at least one can rest assured that if they put just 1% of the efforts to support OS xyz is because this OS has, more or less, 1% of the market. How can you be sure that Microsoft is setting priorities to support Windows guests in the real measure of the marketshare and not in the measure of what they want this marketshare to be?
- Changing the rules: perhaps one of the most important thing which is leading me to think that VMware will not be sunset is the fact that they (VMware) are thinking about “changing the rules” in the datacenter and of IT in general rather than viewing virtualization as a means to reduce the number of servers from 20 to 1. While the use of virtualization has originally being considered for Server Consolidation projects clearly this is now one of the many facets of the advantages that a virtualized Datacenter and a virtualized IT will gain (Disaster Recovery is certainly one example of these new scenarios). Another example of these new use cases for virtualization are Virtual Desktops hosted in the Datacenter that are changing the way Administrators are thinking about their distributed IT. The next frontier would be Virtual Appliances which is a very different way to develop and deploy applications compared to what we are doing today. In such a scenario the role of the Operating System would change drastically where some of the OS features would be drained into the virtual infrastructure while some others will be distributed as part of the application in a consolidated virtual machine file (that is the virtual appliance). This is a fascinating scenario and as you can imagine it involves more than just developing a hypervisor with a management interface: it involves creating a new culture on how we deal with IT, taking all the pieces apart and rebuild our datacenters in a much more efficient way.
These are the reasons for which I don’t think Microsoft is going to sunset VMware. Clearly they will pose a challenge on them (a very tough one) but I don’t see VMware as being kicked out so easily. And the number one reason is because I really think that our Datacenters needs to be re-designed from the ground up. Let me quote myself: “This is a fascinating scenario and as you can imagine it involves more than just developing a hypervisor with a management interface: it involves creating a new culture on how we deal with IT, taking all the pieces apart and rebuild our datacenters in a much more efficient way“. Now if we agree that Microsoft is making a lot of money out of this “legacy” model (this is a fact) but that we need to change it (the legacy model) to become more efficient anyway … do you think that Microsoft itself could be the agent of change in this case? If they are not pushed they will try to maintain the status-quo (well status-quo with license upgrades as new product versions come along). I remember 5 years ago I went to Microsoft asking them what they were doing about virtualization since this little company called VMware was having brilliant ideas on how to consolidate servers and they told me that they response to that was Itanium and Windows 2000 Datacenter. Well they now use Datacenter as a licensing weapon and Itanium …….. I am not even sure if they have a single developer working on that platform any more (despite the marketing brochure you see). We need agent of changes from time to time such as VMware for infrastructure software and AMD for processors otherwise we would now all be still busy trying to migrate our Windows servers to Itanium which would have been funny (so to speak). So in the end I think that Microsoft has too many legacies they need to protect to be really innovative in this context, not to mention all the other challenges I have listed above. But primarily it’s a matter of attitude and let me tell you, having worked for IBM, I do very well understand what legacies and constraints are when it comes to innovate and being focused in some circumstances.
This might sound like a standard “Microsoft bashing” but trust me, it’s not. I don’t have anything against Microsoft (which I still think is a GREAT company with excellent products despite what many people say) as I don’t certainly have anything pro VMware. Fortunately I currently have a third party view that allows me to see what’s going on and build an unbiased opinion without any influence of sort. You might agree or not.
This analysis is as of April 2007. I am sure many things can and will change and I might be proven wrong. Let’s see what happens.