Tuesday, May 20, 2008

The Server Virtualization Battle

Citrix's Xen won't cede to VMware or Hyper-V

It seems like only yesterday when I was wondering about whether the price war in the hypervisor market should be worrying VMware. Wait, it was yesterday. Today I read that Citrix won't concede in the price war or on the technology.

From the TechTarget web site:

In December 2006, two startups, XenSource Inc. (now owned by Citrix) and Virtual Iron Software Inc., kicked off a virtualization price war, offering virtualization for as little as one-sixth the cost of VMware. Last fall with the entrance of Oracle Corp., Novell Inc., Red Hat Inc. and others into the battle, the price competition intensified, and then this spring, rivalry flared when Citrix cut prices again and initiated flat pricing for servers with up to four sockets. Citrix's efforts have met some success as well. Now all the players have geared up for Microsoft's August 2008 launch of Hyper-V, which is extremely low cost at the price of $28 per server. Citrix has a special mission in this new lanscape. Sandwiched in between feature-rich VMware and lower-cost Hyper-V, Citrix's Xen has the daunting task of remaining price-competitive yet fully featured enough to compete.

Citrix's Xen won't cede to VMware or Hyper-V

Yesterday was about VMware not lowering prices because they "…have the right product packages with prices that allow the customer to do whatever it is they need to do with our technology…".

Today is about how "…Citrix may ultimately focus on the desktop virtualization. First, Microsoft hasn't targeted its virtualization efforts to virtual desktops, leaving an opportunity for others to gain advantage."

And that Citrix "…has an open storage interface that integrates innovations from storage vendors into the hypervisor with plug-in drivers."

The rest of the article combines some market-speak with lots of assertions about feature comparisons between Citrix XenSource, VMware and even Microsoft Hyper-V (though to be fair, they state clearly that since Hyper-V isn't shipping feature comparisons are invalid at this time). Lots of on-the-one-hand vs. on-the-other-hand comparisons.

Actually comparing these products and either publishing the results for all to see or sharing them privately with our vendor clients is what my company does best. VMware: hear those footsteps behind you? Novell: wonder why you're not in the top tier? Virtual Iron: the reviewers like you, but don't you need help getting some real market share? Microsoft: we know you're going to deliver something functional eventually; wouldn't it be good to use have some support for your product claims and debunk the critics?

Why don't you give me a call? 

Monday, May 19, 2008

VMware won't lower price, says exec. Does pride go before a fall?

The link will take you to the whole interview, but the point is made in the headline.

VMware won't lower price, says exec

The executive, senior director of product marketing Bogomil Balkansky goes on to explain,

"...The objective is to make sure that we have the right products at the right prices for all types of customers. I don't think that principle is going to change.

I would argue that right now, we have the right product packages with prices that allow the customer to do whatever it is they need to do with our technology. Whether it's something simple like partitioning a server for test and development, a single server consolidation, production server consolidation for a larger environment or if they want to reap the other benefits of virtualization, such as business continuity, disaster recovery and dynamic resource management, they can do that at a price that affords a tremendous ROI. Virtualization is one of those technologies where the ROI is quick, undeniable and easy to see. "

The interview then goes on to address the competitive challenges that VMware is facing, denying that the competitors will have any immediate impact on VMware and in that though Microsoft will become a formidable competitor, they're years away from being even close to VMware in delivering a server virtualization platform with the management functionality enterprises expect.

Mr. Balkansky makes very good points about the strengths VMware brings to the table, and is essentially correct in his assessment of the current server virtualization landscape. The viewpoint is in most essentials that offered by any market leader who has also created the market. In marketing, being first to market with a successful product and sticking with it until the product gets accepted and becomes a de facto standard is the place to be.

Our analysis of server virtualization, including the early work we did in developing tile based virtualization capacity benchmarks, has all centered on VMware. Our research on competing hypervisor and virtualization management not only has looked to VMware as the leader, but has recognized the overall superiority of VMware's products.

There's just this one thing: market leader arrogance. As I said, the viewpoint expressed in the interview is that offered by other market leaders. I'm concerned though about the arrogant tone: no one out there is a real competitor, so we're not really worried about them. We'll watch Microsoft, but Citrix? Xen? non-issues.

Nothing wrong with the assertions. The facts bear them out. But Citrix release of XenDesktop will have an impact, and just because Microsoft hasn't delivered a full management and deployment model for Server 2008 with Hyper-V doesn't mean the immanent release won't be important in the marketplace.

Mr. Balansky may not be willing to express concern in an interview (though I'd be surprise if the filings for the stock market will be so sanguine), but he should be looking over his shoulder. A free, fairly strong offering from Microsoft will have tremendous impact. Especially in the smaller businesses where the costs for ESX and Infrastructure III are perceived as prohibitive. Sure, a company buying two or three or four VMware licenses is not to important VMware. Most vendors don't think about these small sales too often. But there are tens of thousands of companies with a half dozen or so under utilized X86 servers looking at virtualization. Microsoft's offering will be very attractive to these folks. The lack of a full suite of management tools will probably not matter too much since these companies are probably not using that much in the way of sophisticated management platforms anyway.

Hopefully, VMware is investing in following the success of its competitors and looking closely at how their products actually deliver rather than only at the market numbers. Otherwise, a year or two from now, they might be surprised to see their market share shrinking. And shrinking in their existing customer base, where it hurts.