Why VMware Continues to Dominate Despite Hyper-V Advances

    "If I were VMware, I would be looking to lower my prices". 

         Laura DiDio, an analyst with ITIC. (Reuters, July 6, 2009).

Microsoft crushed Novell with Windows NT. It obliterated Netscape with Internet Explorer. With the release of Hyper-V a little over two years ago, financial and industry analysts sounded dire warnings that Microsoft would commoditize the hypervisor and that VMware was in danger.

Hyper-V came out of the gate rather slow, lacking capabilities such as live migration that VMware had long beforehand made standard, but the product has continued to improve. The latest Gartner Magic Quadrant for x86 Server Virtualization Infrastructure includes Microsoft in the leader quadrant, albeit well west and south of VMware which moved still further to the upper right, but analysts again are speculating that VMware’s dominance may be vulnerable. Gartner, though, points out that Microsoft’s “success has been primarily occurring among midmarket customers new to virtualization.” And even in that space, “VMware appears to be winning at least 60% of new customers”, twice as many as Microsoft. VMware shows no signs of slowing down – revenues were up 35% to $634 million last quarter alone.

The obvious question is: how does VMware continue to defy the naysayers?

The Answer to How, may be WHY

The answer, somewhat ironically, may be found in the book that Mark Templeton recommended at 2011 Citrix Summit, Start with Why: How Great Leaders Inspire Everyone to Take Action. Author Simon Sinek makes a compelling case that, “People don’t buy WHAT you do, they buy WHY you do it”.

Go to VMware’s Web site, and the “why” is obvious. VMware is focused on Cloud as the virtualization journey endpoint. Every page educates viewers about the latest in cloud and virtualization technologies, resources and events. VMware attracts customers who share its passion for transforming their data centers into agile and efficient computing models.

Microsoft, on the other hand, advocates a cautious approach to virtualization, “…rather than undertaking a costly revolution, you should evolve your environment in a way that preserves and extends existing investments.” It has long promoted virtualization as a feature of the operating system.

This difference in philosophy permeates Microsoft’s home page which provides plenty of information on products such as Small Business Server, Windows Intune and Office 365, but nothing on virtualization. Even clicking on the Datacenter or Desktop tabs provides no clues that Microsoft is in the virtualization space. Only the Cloud tab enables an eventual navigation to the tired-looking (it’s hardly changed since inception) virtualization home page. Whereas the messaging two years ago was almost exclusively about how Hyper-V was less expensive than vSphere, the site now challenges readers with, “How far will you take virtual?”  The gist is that one can use Hyper-V to virtualize applications such as Microsoft Exchange and Share Point Server.  Revolutionary?  Not so much.

 

    When to Use Hyper-V Server 2008 R2

    You can use Microsoft Hyper-V Server 2008 R2 for the following scenarios:

• Test and Development
• Server Consolidation
• Branch Office Consolidation
• Hosted Desktop Virtualization (VDI)

        From Microsoft Hyper-V Server 2008 R2 Home Page

  
Organizations sharing Microsoft’s perspective may find that Hyper-V is, in many cases, good enough. But when viewed as an enterprise platform, virtualization has the potential for enabling data center transformation. The Gartner magic quadrant report says that “virtualization is an extremely strategic foundation for infrastructure modernization, improving the speed and quality of IT services, and migrating to hybrid and public cloud computing.”

Effecting this transition is not a simple task – the majority of organizations struggle with virtual stall. Most are consequently unwilling to gamble on a solution that lowers the probability of success. When it comes to data center transformation, “good enough” simply isn’t.

Why Licensing Cost is an Irrelevant Metric

VMware’s ability to increase the likelihood of successful completion of the virtualization journey makes any licensing cost delta with Hyper-V irrelevant. This doesn’t stop Microsoft from indulging in a bit of comparison including white papers, brochures, videos, charts, price-oriented case studies, a Microsoft vs. VMware Cost Comparison Calculator and the Microsoft Virtualization ROI Calculator.

These licensing comparisons are made in isolation with no consideration of the many other, and some much larger, costs of implementing virtual infrastructure. Only a small increase in VM hosting density, for example, should much more than compensate for any licensing cost delta by reducing monies required for servers, rack space, power, cooling, guest VM operating system licenses, etc. Hyper-V’s dependence on Windows puts it at a disadvantage by subjecting it to performance and scalability limitations. Its requirement for using segregated physical hosts rather than tying security to logical boundaries also can require additional hardware.

Unlike Hyper-V, vSphere offers data center stability and security that is independent from the bloat, reliability and patching issues of a general-purpose operating system. Even Redmond Magazine, “The Independent Voice of the Microsoft IT Community” gave its 2008 Editors Choice award for the most reliable IT technology to VMware ESX (the IBM mainframe came in #2). This exceptional reliability along with capabilities such as the vDistributed Switch further increase the VMware cost advantage by enabling the virtualization of more tier-1, DMZ and regulated servers.

Enterprise Capabilities, Security and Cloud Advantages

In a recent INX white paper, I discuss the problems that result when approaching virtualization with a physical mindset. These issues become more pronounced in the enterprise space; it is not surprising that VMware particularly dominates this market given its significant lead in enterprise capabilities, management and automation tools.

As organizations increasingly embrace Cloud, security becomes a critical aspect to success. But firewalls, intrusion-detection appliances, load balancers, and VPNs designed for a physical environment don’t work well with virtual machine mobility. VMware is unique in providing virtualization-aware security delivered from the hypervisor layer. Network access to the DMZ and regulated servers is controlled on a virtual machine by virtual machine basis. Security policies can be provisioned very quickly, yet they remain in place as Virtual Machines move across hosts. VMware’s approach also eliminates the the requirement for VLAN and port mapping rules that tend to result in VLAN sprawl.

“One emerging area of success for VMware is the cloud infrastructure service provider market. Thousands of service providers are now using vSphere, and a growing number are involved in the vCloud initiative.”

                        Gartner Magic Quadrant for X86 Server Virtualization

VMware has a huge lead in providing vCloud products that enable multi-tenancy, full virtual layer 2 networking, true support for logical resource pools and much more. VMware vCloud Director is positioned to quickly become a broad-based industry platform for enabling optimized cloud among both private and public service providers.

Here’s the Beef

    “We take the hamburger business more seriously than anyone else”

                                Ray Kroc, founder of McDonald’s

It is difficult, even for an organization with the talent and resources of Microsoft, to be all things to all people. The Redmond giant has a vested interest in maintaining the large Windows-centric architecture common in most data centers. If it were true, as Microsoft insists, that “Virtualization is simply a role within Windows®,” the company would be able to better leverage its strengths as a low cost, high volume software provider.

From the beginning, VMware has bet-the-company that virtualization is not just a Windows feature but is an enterprise platform. It has a laser focus on facilitating transformation of the inefficient physical data centers of the past into more agile and responsive IT-as-a-Service models.  Attendees at Microsoft's own TechEd 2010 voted VMware vSphere as Best of Show - Virtualization. And VMworld next month in Las Vegas is expected to draw 20,000 attendees, making it one of the largest IT conferences on the planet. VMware’s “why” continues to resonate.

 

See also:

Microsoft, Citrix Join VMware at top of Gartner’s Magic Quadrant. 07/05/11. Jon Brodkin, NetworkWorld.

Is Microsoft Hyper-V Keeping VMware Up at Night? 01/21/11. Kevin McLaughlin, CRN.

Virtual Stall? Virtual Schmal… (esp. Andi Mann comment). 01/20/11. Bruce Hoard. Virtualization Review

Hyper-V is Underperforming says Gartner 10/20/10. Virtualization.Info

Hyper-V Security Comes Under Scrutiny. 07/31/09. Todd R. Weiss. SearchServerVirtualization.com

 

Author Disclosure: I work for a professional services company which is also a leading VMware partner.

 

 

Comments

[dw]

nice article.

While reading it I was asking myself why VMWare and not HyperV? (we use vmware) These popped in my head.

"No one ever got fired for buying vmware."

"VMWare *is* virtualization, Microsoft is an OS."

"VMWare just works, HyperV, hmmm I suppose, probably, *shrugs shoulders*..."

Now these are just impressions or feelings.

They are certainly untrue/true in one sense or another but thats the nature when dealing with *feelings*, which is what marketing is, I suppose.

dw

[Steve Kaplan]

DW,

Thanks for the comment...although VMware does very little of what most people probably primarily consider marketing to be - advertising. VMware markets by building its brand through the strength of products and solutions. And unlike Microsoft, I've never seen it directly attack a competitor even once - let alone making competitive comparisons a marketing focus.

[CiscoServerGeek]

Great post Steve.

My mother worked at McDonald's for many years managing one of their stores. Ray Kroc would also tell you that McDonald's was actually in the real estate business, buying up every great corner in America and leasing back to the franchise owner.

Maybe there are more parallels to draw.

[Steve Kaplan]

Thanks for your comment Scott. I used to work at McDonalds as a kid, and also did an in-depth project on them for grad school. By pure luck, I ended up doing the project with the son-in-law of long-time McDonald's CEO, Fred Turner. I was fortunate to spend a fair amount of time with Fred and the other McDonald's execs and even shook hands with Ray Kroc at the annual meeting (he was not too coherent by that time having suffered a stroke).

I have heard the same thing repeatedly about McDonalds really being in the real estate biz, but I think that the story is a little misconstrued. My understanding was that Ray got involved in real estate in order to guarantee that he made a profit, but he was all about "taking hamburgers more seriously than anyone". I think it was this intense focus that was a major cause of his success - and perhaps it's McDonald's current lack of a narrow offering that has now let more focused competitors such as In N Out and Five Guys to make huge inroads.