g06.2012 magic quadrant x86 server virtualization infrastructure

24‑06‑12 Magic Quadrant for x86 Server Virtualization Infrastructure

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Magic Quadrant for x86 Server VirtualizationInfrastructure11 June 2012 ID:G00234567

Analyst(s): Thomas J. Bittman, George J. Weiss, Mark A. Margevicius, Philip Dawson

VIEW SUMMARY

Market Definition/DescriptionThe x86 server virtualization infrastructure market includes all x86based workloads (i.e., application,Web and database servers; hosted virtual desktops [HVDs]; file, print and security servers) deployed onstandard x86based physical servers.

Solutions for this market leverage:

Hypervisors to create virtual machines (VMs)

Shared OS virtualization technologies (also called "containers")

Server virtualization administrative management (base frameworks)

Server virtualization embedded management (live migration and basic automation ofadministrative management functions)

Not included are higherlevel management functions, such as operational automation tools that dealwith virtual resources, application performance tools that leverage and monitor virtualization, disasterrecovery tools that leverage virtualization, desktop provisioning and brokering software, etc.

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Magic Quadrant

Figure 1. Magic Quadrant for x86 Server Virtualization Infrastructure

Source: Gartner (June 2012)

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Vendor Strengths and Cautions

Citrix SystemsCitrix is leveraging its position in desktop virtualization and new focus on cloud computinginfrastructures to grow its foothold in the server virtualization market as the thirdplace vendor interms of market share. Unlike VMware and Microsoft, Citrix's server virtualization business is drivenalmost entirely by its strength in desktop virtualization. The HVD opportunity now accounts for morethan onethird of x86 server virtualization infrastructure VMs. Citrix XenDesktop is the leading desktopvirtualization solution in the market, and the majority of its HVDs are hosted on XenServer. XenServertends to be the desktop virtualization host of choice for smaller enterprises that use XenDesktop. Thismarket is not without competition. VMware is the primary desktop virtualization host, and Microsoft is agrowing factor.

However, demand for XenServer for server workload virtualization has declined, especially inenterprises. Growth of service providers is offsetting some of that decline. Some service providers areconverting from opensource Xen to XenServer (where Citrix hopes to upsell additional Citrix products),



while others are deploying CloudStack as a cloud management platform, often leveraging XenServer.Regardless, the service provider opportunity for XenServer will be a challenge to monetize, and notnearly as important as desktop virtualization.

In the past year, Citrix released XenServer version 6, including scalability, management, storage andmemory improvements. Importantly, Citrix has made key strategic changes in the last year, focusingmore on multihypervisor cloud infrastructures (based on its acquisition of Cloud.com), which may helppromote use of XenServer, but does not require it.

Key to Citrix's strategy is its ability to leverage a very large and loyal customer base (of more than200,000 customers) of all its products. These customers typically use a variety of Citrixproducts/technologies, with XenApp as the product holding most of the mind share. Although Citrix hasbeen successful selling XenApp, the company recognizes that the market opportunity for the desktop,by selling XenDesktop, is much larger than XenApp can address. Therefore, Citrix requires a positionwithin the HVD market to grow its installed base.

Citrix offers XenDesktop as an umbrella set of technologies to deliver the desktop. It includes XenApp,Provisioning Services, XenClient (a Type 1 hypervisor for PCs) and XenServer. This rapid adoption ofXenDesktop has carried XenServer into some VMwarecentric organizations. While VMware vSpherecontinues to be a broadly used hypervisor in XenDesktop deployments (especially in large enterprises),many enterprises are beginning to question the viability of supporting a different VM infrastructurewhen they could reduce costs by using XenServer or HyperV. This is certainly a trend that Citrix hopesto exploit for desktop virtualization and cloud infrastructures, and one for which Citrix has had somesuccess, especially in smaller companies.

In server virtualization, Citrix and Microsoft have a somewhat complicated relationship. While Citrixsupports HyperV and has a longterm partnership with Microsoft, winning at the desktop layer isimportant if Citrix will expand its management, automation and cloud business further. As a result,Citrix's gotomarket strategy regarding how it competes with/complements Microsoft remainsconfusing for many customers and channel partners. Regardless, it is apparent that Citrix is willing tosacrifice the server platform to Microsoft and HyperV to grow its desktop virtualization business.Marketing and sales execution remain key future success factors for Citrix.

Furthermore, Citrix has expanded on its vision for private and public cloud computing withCloudPlatform, its commercial offering of CloudStack (which Citrix contributed to the Apache SoftwareFoundation after acquiring Cloud.com). One of Citrix's objectives is to offer a highly scalable and reliablecloud computing environment for service providers and enterprise customers, competing against thebetterknown OpenStack project. While it is still early in the process, Citrix has had notable serviceprovider customer success with CloudPlatform, which is driving some XenServer growth. Importantly,CloudPlatform supports several hypervisor technologies in addition to XenServer (in homogeneous orheterogeneous environments).

While server virtualization remains important to Citrix, the company's business focus is moving furtherup the stack and isn't reliant on winning at the hypervisor layer. During the past year, we have seenless emphasis by Citrix in promoting and positioning XenServer as a standalone virtualization offering;rather, Citrix has positioned XenServer as an ingredient to broader solutions specifically targeted at thedesktop and cloud markets.

Strengths

Rich product capabilities for relatively low cost (starting with the freeofcharge XenServer edition)

Large opportunity in the cloud service provider market that relies heavily on opensource Xentoday

Bundling of XenServer with other Citrix products, and ability to leverage its desktop virtualizationmarket position and installed base for XenServer sales

Very large and loyal channel

Cautions

XenServer marketing execution and reach

Opensource software (OSS)based competition (especially from Red Hat RHEV and KVM)

Continued market and strategy complexity in its partnership with Microsoft (specifically withrespect to XenServer)

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MicrosoftMicrosoft has been in the market with HyperV and System Center Virtual Machine Manager (VMM) forfour years. There have been three major deliverables in that time: (1) HyperV (and System Center2008) in mid2008, (2) Live Migration and Cluster Shared Volumes in Windows Server 2008 R2 andSystem Center 2008 R2 in late 2009, and (3) Dynamic Memory in Windows Server 2008 R2 ServerPack 1 (SP1) and System Center 2008 R2 SP1 in early 2011 (important for HVD deployments).Microsoft has not updated HyperV in the past year, but a major release — Windows Server 2012 — isexpected in late 2012. System Center 2012 VMM was released in April 2012, but too late for evaluationin this research.

Microsoft has been gradually closing the functionality gap with VMware in terms of the hypervisor andbasic administration capabilities. However, VMware had a six to sevenyear head start, and thecadence of Microsoft's enhancement delivery has been relatively slow. This Magic Quadrant is based onWindows Server 2008 R2 SP1 and System Center 2008 R2 SP1 — both of which are incrementalenhancements to major releases delivered four years ago. The market has been moving quickly,beyond basic virtualization and virtualization management, and favoring solutions that can be morefully automated and provide selfservice (toward private cloud computing). This combination is makingit difficult for Microsoft to take significant market share. The majority of Microsoft's success has beenwith midmarket companies (especially those with fewer than 1,000 employees) that are relatively newto virtualization (where they are winning 30% to 40% of the time), and in peripheral, branch or storeroles in larger enterprises (that are primarily VMware customers). There are a few exceptions whereMicrosoft has converted large VMware installations; the primary driver for those conversions wasVMware's relatively high price.



HyperV in Windows Server 2008 R2 SP1 and VMM in System Center 2008 R2 SP1 can meet therequirements of most midmarket deployments, and even for large enterprises that are just starting tomake plans for private cloud pilots. Microsoft still needs to overcome an installed base that is usuallywellentrenched with VMware vSphere and vCenter management and automation tools. Microsoft'sapproach of "surrounding" VMware with heterogeneous management capability in System Center VMMhas had marketing appeal, but few customers have leveraged it.

One of Microsoft's challenges is to create a broader service provider appeal for HyperV. Until recently,Microsoft's service provider focus was for hosters to use HyperV for more traditional consolidation.Microsoft's Azure service used a modified HyperV, and would not support standard HyperV Virtual HardDisks (VHDs). Two shifts relative to service providers are coming: (1) Microsoft Azure's VM Role (in betafor the past two years) likely will support Windows Server 2008 R2 VHD images, and (2) System Center2012 will make it easier for service providers to create infrastructure as a service (IaaS) cloud offeringsbased on HyperV. The strategy is becoming clear, but Microsoft's issue is timing. VMware has beenpromoting vSphere for cloud computing infrastructures for several years. However, in the past year,Microsoft increased its service provider program around HyperV use from dozens of providers to severalhundred. A test for Microsoft's potential in the x86 server virtualization infrastructure market will comeduring the next year, as the company delivers what it claims to be major HyperV enhancements inWindows Server 2012, and as System Center 2012 is deployed.

Strengths

Administrative environment that is familiar to Windows administrators

Installed base of Windows, especially a large number of Windowsonly enterprises

Strength of solution for midsize enterprises and low price

Company financial strength

Cautions

Difficulty converting or surrounding a strong VMware installed base, especially in large enterprises

Competing with VMware for channel and service provider influence

Relatively slow cadence of delivery of enhancements (major release every four years)

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OracleOracle VM is Oracle's implementation of the Xen hypervisor that also leverages intellectual property thatOracle acquired from Sun Microsystems and Virtual Iron. Oracle has integrated these technologies intoa more coherent and packaged solution with the Oracle VM 3.1 release. Oracle is converging on OracleEnterprise Manager 12c to manage its virtualization and infrastructure portfolio. This includes Oracle VM(an x86 architecture product, based on Xen), Oracle VM Server for SPARC (based on Sun LDOMtechnology), Oracle Solaris Containers, Oracle Linux Containers (currently offered as a technologypreview only) and potential software appliances using Oracle VM, storage and other related virtualizedinfrastructures. This management unification is an important direction and foundation for Oraclevirtualization and other products, because it builds an integrated approach to selling virtualizeddatabase management system (DBMS) and application server hardware, software solutions, attachedstorage and Oraclebased management solutions. Among competitive x86hypervisorbased solutions,Oracle has chosen to certify its software solely on Oracle VM. Most of the customer references thatGartner investigated stated that certification and licensing were their primary reasons for choosingOracle VM.

In addition, Oracle favors Oracle VM for software licensing and pricing — for example, with processorpinning (allowing the specification of a limited number of processors being used by a VM, which canreduce software costs when live migration is not required). Oracle's corporate strategy is "integratedbut open," which encompasses the company's infrastructure stack. While Oracle solutions are optimizedto work with one another, they still work with supported thirdparty vendors. Oracle VM is a solid andmaturing solution for Oraclecentric architecture, and is becoming a valuable component of anintegrated Oraclemanaged architecture as more management features are added. Gartner is receivinga growing number of inquiries from clients considering and using Oracle VM. Several clients havereported that previous difficulties around live migration and storage recovery have generally beenresolved.

Oracle Solaris Containers offer shared OS virtualization capabilities for tactical x86 deployments.Containers provide differentiated benefits for x86 Oracle users — higher virtualization density andreduced operational costs due to fewer OS instances, something that hypervisorbased solutions cannotdo. In this sense, Oracle Solaris Containers alongside Oracle VM can be a complementary solution,targeted at different application requirements.

Strengths

Preferential licensing and certification of Oracle software using Oracle VM

Oracle's overall software installed base and financial strength

Strong solution in Oracle managed stack, including many readytouse VM and applicationtemplates

Solaris Containers complements Oracle VM as a lightweight alternative to a hypervisor

Cautions

Oracle still focuses on an "Oracle only" virtualization market and user requirements

Oracle broad adoption is still slow, although gaining share in Oracle Accounts

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ParallelsParallels Virtuozzo Containers is a shared OS virtualization solution available for Linux and Windows.Parallels is a major driving force behind OpenVZ, which is essentially the foundation of ParallelsVirtuozzo Containers, and an important source of potential migrations to Parallels Virtuozzo Containers.



Parallels Virtuozzo Containers allows multiple applications to run in lightweight, separate containersoffering processor affinity and memory protection and isolation. Compared with hypervisorbasedsolutions, Parallels Virtuozzo Containers can reduce OS software and administration costs in muchhigher densities. Parallels also offers portability and live workload migration. The whole architecture ofcontainers enables a workload and container to spin up faster with less performance overhead than VMsolutions.

Originally, Parallels Virtuozzo Containers focused on the service provider market, which has remained aloyal and viable community for Parallels. With the growth of enterprise virtualization, Parallels enteredthat market several years ago, without much success. Since last year's Magic Quadrant analysis,Parallels has continued to shift its focus exclusively to service providers. This has been a populardecision among its service provider customers, who felt that Parallels had been less responsive to theirrequirements a few years ago, but who now say responsiveness has improved considerably.

As cloud computing evolves, Parallels is positioned well with service providers (and, through them,midmarket enterprise customers), but has yet to become a factor with large enterprises. Its lack offocus on onpremises enterprise virtualization may make growth into large enterprises difficult. Parallelshopes that a broad shift to cloud computing will bring more large enterprises to service providers, thusbuilding cloud services based on Parallels' software.

For now, Parallels offers the best solution for service providers building highdensity, but isolated,solutions around common workloads, such as Web serving. Parallels has a challenge and an opportunitywith OpenVZ — expanding the use of containers, especially by service providers, but adding enoughvalue to monetize that through Parallels Virtuozzo Containers (and other Parallels cloud service deliverysoftware).

Parallels Server 4 Bare Metal, which is based on a hypervisor architecture, is not covered in this MagicQuadrant, because Gartner has not found enough references using it. However, Parallels' success withcontainers, common management and automation tools creates an opportunity for expansion withBare Metal into the service provider market.

Strengths

Unique and innovative containerbased solution, including live migration and increased isolation

Parallels Virtuozzo Containers is the leading product with a containersbased solution for serviceproviders

Reduced administrative and OS software costs, and higher density compared with hypervisorbased solutions

Cautions

Importance of an enterprise customer base (and onramp) as hybrid cloud computing evolves

Being able to monetize opensource OpenVZ container growth

Dependence by many workloads on a single host OS

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Red HatRed Hat has made some progress year over year in the Magic Quadrant, but only incrementally. On thepositive side, Red Hat delivered key virtualization functionality, such as live migration, as part of itsRHEV 3 release in early 2012. This allows Red Hat to more effectively market a multipronged strategybased on RHEL as the most popular Linux OS, integrated with KVM as a kernelembedded Linuxhypervisor and RHEV as the ecosystem. KVM is now proven to be one of the best performinghypervisors in the market. Its integration with the Linux kernel presents a ready bridge for the majorityof Linux OSs not yet virtualized by KVM or Xen, or deploying Linux OS instances on VMware. Gartnerestimates that 35% to 45% of Linux instances are currently virtualized.

However, its current improved execution on product and technology alone will not be sufficient to liftRed Hat into the Leaders quadrant without a more robust and comprehensive marketing effort. Red Hatwas restrained by product limitations, but 2012 represents a watershed year for Red Hat to swing themassive Linux installed base to RHEV, especially since every Linux has the KVM hypervisor as part ofthe kernel. While most OEM vendors — such as IBM, HP and Dell — have acknowledged KVM as theirstrategic Linux hypervisor of choice, most of the vendors did not proactively market KVM without amanagement ecosystem to compete against VMware. Our discussions with Linux users have foundmost are satisfied running Linux instances on VMware. They have achieved good virtualization results;switching to KVM/RHEV would represent seeking budget approval to test and deploy new applications,migrate VMs from VMware and deal with territorial control issues staked out by VMware administrators.Red Hat's philosophy is to drive management through opensource software (OSS) products and enablethirdparty products through open interfaces (e.g., oVirt). These efforts are still early stage, and someusers (based on Gartner inquiries) have balked at the perceived high VM guest subscription pricing. RedHat has been reluctant to yield on pricing, to maintain its margins and financial consistency.

As a consequence, Red Hat has had difficulty generating momentum and enthusiasm from theenterprise IT organizations, especially ones with limited skills, comfortable and entrenched alternatives(either VMware or Microsoft), or price resistance.

There have been other OSS Linux alternatives, such as Oracle VM (based on Xen), Citrix (XenServer),Parallels (Parallels Virtuozzo Containers) and SUSE (Xen and KVM). We expect Linux Containers toappear later this year in production proof of concepts that will obviate the need for a hypervisor,especially in hosted environments seeking low overhead and high multitenancy.

Adding to the challenge is Red Hat's effort to drive cloud adoption for RHEL with cloud provisioning andmanagement. Red Hat uses KVM/RHEV as an important foundation for cloud infrastructureenablement. This strategy implies user acceptance of RHEV with the KVM hypervisor, but proven cloudready implementations must accelerate. Competition in cloud is mounting from freeofcharge OSSalternatives, such as Ubuntu and Xen, or from Parallels in hosting environments. As a result, Gartnerbelieves that marketing execution and understanding must be better addressed for Red Hat to furtherimprove its positioning on the Magic Quadrant for x86 Server Virtualization Infrastructure.



On a tactical level, users have indicated that the KVM experience with Red Hat tools has beenacceptable. But on a strategic level, few users seem so assured as to declare that large parts of their ITinfrastructure and services will standardize on RHEV. Production versions shipped in February 2012.Red Hat still has catching up to do visavis VMware in manageability (e.g., storage management). RedHat is counting on its acquisition of Gluster to pave new virtualization opportunities in large filebasedapplications and clusters.

Gartner's client contacts continue to reveal cautious interest in Red Hat virtualization and comprisepredominantly proofs of concept. The most friendly to Red Hat virtualization will be stronglyindependent Linuxbased organizations, academic and government institutions, and technicalcomputing centers. In commercial businesses, clients running RHEL often express some interest invirtualization, but have made commitments to VMware (or others) and are cautious about makingadditional commitments that expand required toolkits and administration skills.

Strengths

Strong and loyal RHEL customer base opportunity (mostly unvirtualized)

Integrated hypervisor with Linux kernel (e.g., leveraging mature scheduling)

Performance and security

Ease of access and installability

Leadership of the core KVM OSS development community

Cautions

Limited sales and marketing execution

The majority of virtualized RHEL instances are running on VMware

Limited ecosystem of tool vendors

RHEL VM guest pricing tiers are inhibitors to rapid market expansion

Limited production use and experience with RHEV 3

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VMwareVMware has maintained its strong functionality lead with the introduction of vSphere 5.0 in 2011,including a new highavailability architecture and increased scalability. VMware continues to havedominant market share, and customers remain satisfied with product capabilities and vendor support.However, concern over vendor lockin is increasing. Also, VMware's pricing change toward virtualmemory entitlements has raised concerns about pricing model volatility and pricing disparity betweenVMware and the competition. There has been growing interest during the past year in competitiveevaluations and creating a separate virtualization footprint with a different technology — typicallyMicrosoft HyperV, although Oracle VM use is also growing among VMware customers. However,Gartner sees very few actual customer conversions from VMware at this point.

None of this has slowed VMware's rapid growth, as the total number of server workload VMs deployedduring the past year is 30% higher than those deployed a year ago, and HVD workload VMs is 50%higher. While VMware's share of that growth is strong, it is not the same 100% market share thatVMware enjoyed in 2005. Competition has been improving.

VMware's overall vision is synchronized with the market interest (especially large enterprise interest) inprivate cloud computing, and hybrid cloud computing (federating between private and public cloudservices using vCloud Director). While service providers are concerned with the potential ofcommoditization created by a common cloud infrastructure, the cost of VMware, and the relativeimmaturity of vCloud Director compared with their enterprise and scaling requirements, these serviceproviders are very interested in interoperability with the large enterprise installed base of vSphere. Thenumber of service providers offering vSpherebased services continues to grow.

On the desktop, VMware continues to expand and deliver on its View and ThinApp offerings. Theintegration of View and ThinApp has provided customers a fairly comprehensive solution that enablesclients to scale HVD deployments to projects that are larger and more complex than prior iterations ofthe product.

With respect to the growing midmarket business, where highend management and automationfeatures are less critical, VMware has retained a strong market share. (Gartner surveys consistentlyshow that 60% to 70% of midmarket companies, between 100 and 1,000 employees, tend to useVMware.) As Microsoft gains momentum, price — at least in Microsoftcentric enterprises — may makeit difficult for VMware to retain that share. As VMware tries to push virtualization to the more missioncritical workloads, it will face a strengthening Oracle VM solution, at least for Oraclebased software.While Windowsbased workloads have become heavily virtualized, there is still quite a bit of opportunityfor Linuxbased workloads. (Gartner estimates that Windows is 50% to 60% virtualized, while Linux is35% to 45% virtualized.) Citrix, Oracle, Red Hat and open source could make VMware's expansiondifficult.

VMware's primary market issues are price and the interest in heterogeneity. VMware depends onvSphere revenue as it expands into higherlevel management and automation software, but it mayneed to make adjustments if customers look at the competition more seriously during the next year.On heterogeneity, while few customers are heterogeneously managing VMs today, the interest is there,which is a primary differentiator touted by Microsoft with System Center VMM. VMware has atechnology preview called the vCenter XVP Manager and Converter, which allows for some basic HyperV management (introduced in February 2011). That technology preview may need to becomesupported functionality for VMware to fight off the market perception that it is "closed."

Strengths

Virtualization strategy and road map that lead to private and hybrid cloud computing

Technology leadership and innovation

High customer satisfaction

Large installed base (especially among large enterprises), and a large and growing number of



service providers using vSphere (enabling choice of service providers)

Cautions

Business model depends on vSphere revenue to expand and invest in adjacent markets

Maintaining high revenue growth in a more product and pricecompetitive market that is already50% penetrated

Focused homogeneous virtualization vision in a market where customers are concerned aboutlockin, and service providers want differentiation

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Vendors Added or DroppedWe review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change.As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope maychange over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the nextdoes not necessarily indicate that we have changed our opinion of that vendor. This may be a reflectionof a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

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AddedNone

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DroppedNone

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Inclusion and Exclusion CriteriaVendors that were eligible for inclusion in this Magic Quadrant met the following criteria:

They must provide x86 serverbased solutions to virtualize applications from OSs, or OSs from x86server hardware, using:

Hypervisors

Container technology

They must provide basic administrative tools for those solutions:Administrative management frameworks/suites for hypervisors/containers

Embedded virtualization management technology (e.g., live migration)

They must have at least 100 organizations using their generally available products as of 1 March2012

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OpenSource Communities (e.g., Xen and KVM Hypervisors) Versus VendorEmbedded OpenSource Software Business ModelsThe x86 server virtualization infrastructure Magic Quadrant includes only commercial vendorbasedofferings, and not individual positions and evaluations for OSS projects, such as KVM and Xen. Theomission of Xen and KVM as OSS projects follows the same decision used in the 2011 Magic Quadrant(see "Magic Quadrant for x86 Server Virtualization Infrastructure"). Opensource projects would bepenalized in the Magic Quadrant as a consequence of being a communitysponsored development,compared with the specific financial and marketing goals of vendors using the same underlyingtechnology. Nevertheless, they are represented within commercial vendor offerings such as Citrix(Xen), Oracle VM (Xen) and Parallels (containers).

External service providers (ESPs), startups and entrepreneurs who have the necessary inhouse skillscan use open source to develop, test, configure, build and maintain their own environments. Cloudservice providers are more likely to have the technical skills and shave margins in their services andproduct offerings to keep costs low, and they will likely develop and deploy their automation tools on alicensefree OSS version of the hypervisor (e.g., Amazon and Google).

Users have the choice of selecting either vendorspecific implementations of virtualization or OSScommunitysupported projects, including the types of virtualization (OShosted versus hypervisors)inclusive of monitoring and management tools, or a buildyourown approach, with selfmaintenance orsupport of service providers. The selfmaintenance and integration approach avoids subscription supportlicenses and vendor dependencies, but will add to internal support costs if skills are minimal orinfrastructures are poorly implemented, resulting in morefrequent outages and downtime.

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Evaluation Criteria

Ability to ExecuteWe evaluated technology providers on the quality and efficacy of the processes, systems, methods andprocedures that enable IT provider performance to be competitive, efficient and effective, and topositively affect revenue, retention and reputation. Ultimately, technology providers are judged on theirability and success in capitalizing on their vision.

Ability to Execute in server virtualization is not simply about product features, but also aboutmaintaining a constantly changing business model in a dynamic trend. Good products could fail, and



poor products could be successful, based on effective vendor execution.

Product/Service: Core goods and services offered by the technology providers that compete in/servethe defined market. This includes current product/service capabilities, quality, feature sets and skills,whether offered natively or through OEM agreements/partnerships. Key factors that are evaluatedinclude the range of OSs and applications supported; scalability and efficiency; elasticity; maturity;embedded resource management; management features to reduce administrative burden; ability toadminister the holistic, virtualized ecosystem; administrative scalability; and integration with thirdparty enterprise management providers.

Overall Viability (Business Unit, Financial, Strategy, Organization): An assessment of theoverall organization's financial health, the financial and practical success of the business unit, and thelikelihood of the individual business unit to continue to invest in the product, continue offering theproduct and advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The technology provider's capabilities in all presales activities, and thestructure that supports them. This includes deal management, pricing and negotiation, presalessupport, and the overall effectiveness of the sales channel. Customers included are enterprises andservice providers.

Market Responsiveness and Track Record: The ability to respond, change direction, be flexible andachieve competitive success as opportunities develop, competitors act, customer needs evolve andmarket dynamics change. This criterion also considers the provider's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver theorganization's message to influence the market, promote the brand and business, increase awarenessof the products, and establish a positive identification of the product/brand and organization in theminds of buyers. This mind share can be driven by a combination of publicity, promotions, thoughtleadership, wordofmouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to besuccessful with the products evaluated. Specifically, this includes the ways customers receive technicalor account support. This can also include ancillary tools, customer support programs (and the qualitythereof), the availability of user groups and SLAs.

Operations: The ability of the organization to meet its goals and commitments. Factors include thequality of the organizational structure, such as skills, experiences, programs, systems and othervehicles that enable the organization to operate effectively and efficiently on an ongoing basis (seeTable 1).

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria Weighting

Product/Service high

Overall Viability (Business Unit, Financial, Strategy, Organization) high

Sales Execution/Pricing high

Market Responsiveness and Track Record low

Marketing Execution high

Customer Experience standard

Operations low


Completeness of VisionWe evaluated technology providers on their ability to convincingly articulate logical statements aboutcurrent and future market direction, innovation, customer needs and competitive forces, and how wellthey map to the Gartner position. Ultimately, technology providers are rated on their understanding ofhow market forces can be exploited to create opportunities for providers.

In the server virtualization market, vendor understanding and articulation of the strategic path forvirtualization (expanding into the foundation for the future infrastructure architecture and operations,and extending toward cloud computing) is particularly important and differentiating.

Market Understanding: The ability of the technology provider to understand buyers' needs, and totranslate those needs into products and services. Vendors that show the highest degree of vision listento and understand buyers' wants and needs, and can shape or enhance those wants with their addedvision. The market includes enterprises with their own strategies to build private cloud solutions, andcloud computing providers.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughoutthe organization and externalized through the website, advertising, customer programs and positioningstatements.

Sales Strategy: A strategy for selling products that use the appropriate network of direct and indirectsales, marketing, service, and communication affiliates that extends the scope and depth of marketreach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: A technology provider's approach to product development and deliverythat emphasizes differentiation, functionality, methodology and feature set, as they map to current andfuture requirements. Interoperability between enterprises and service providers (and betweenproviders) is also growing in importance.

Business Model: The soundness and logic of a technology provider's underlying strategic businessproposition.



Vertical/Industry Strategy: The technology provider's strategy to direct resources, skills andofferings to meet the specific needs of individual market segments, including verticals (enterprises andservice providers).

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capitalfor investment, consolidation, or defensive or preemptive purposes.

Geographic Strategy: The technology provider's strategy to direct resources, skills and offerings tomeet the specific needs of geographies outside the native geography, either directly or throughpartners, channels and subsidiaries, as appropriate for the geography and market (see Table 2).

Table 2. Completeness of VisionEvaluation Criteria

Evaluation Criteria Weighting

Market Understanding high

Marketing Strategy high

Sales Strategy standard

Offering (Product) Strategy standard

Business Model standard

Vertical/Industry Strategy standard

Innovation standard

Geographic Strategy low


Quadrant Descriptions

LeadersCitrix, Microsoft and VMware remain in the Leaders quadrant in 2012. Microsoft has been improving itsoverall road map and clarifying its strategy, but still struggling to deal with an entrenched VMware —especially in large enterprises. The functionality gap between VMware and Microsoft for basic x86 servervirtualization infrastructure has gradually narrowed, while the pricing gap hasn't narrowed. Citrixremains a major player, but at this point due entirely to its strength in hosting desktop virtualizationworkloads, not in the general server virtualization market.

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ChallengersOracle has entered the Challengers quadrant in 2012, as it is improving its product capabilities, gainingmore traction in Oraclebased accounts and focusing its strategy.

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VisionariesIn this maturing market, there are no vendors in the Visionaries quadrant.

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Niche PlayersParallels and Red Hat remain Niche Players in this market. Parallels continues to be a strong choice forservice providers focused on highdensity deployments of specific applications, and it will likely leveragethat strength to expand its offerings over time. In the past year, Parallels has improved its focus on itscore service provider market. Red Hat remains a general contender in the x86 server virtualizationinfrastructure market, with a significant amount of Linux in the market that has yet to be virtualized.

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ContextAs of mid2012, more than 50% of x86 architecture workloads have been virtualized on servers, andthe market is in the middle of its fastest expansion to date. While saturation will begin to have an effectand slow the market in the next few years, there continue to be growth opportunities in midmarketenterprises, the Linuxbased market (which is less virtualized than Windows) and expansion into moremissioncritical workloads. Many large enterprises are in the early stages of private cloud computing,which is causing them to evaluate their virtualization foundation, consider multiple services based ondifferent technologies, and analyze the possibility of managing multiple hypervisors. Pricing remains aconcern, with huge disparities across the offerings, and licensing and entitlements continuing tochange. Service providers are also adding more support for interoperability with virtualized enterprises,enabling easier migration and even hybrid cloud computing. All these trends are affecting the x86server virtualization infrastructure market.

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Market OverviewThe x86 server virtualization infrastructure market is the foundation for two extremely importantmarket trends that relate and overlap: infrastructure modernization and cloud computing. Forinfrastructure modernization, virtualization is being used to improve resource utilization, improve thespeed of resource delivery and encapsulate workload images in a way that enables automation.Virtualization is a horizontal trend in this sense, with the vast majority of enterprises and workloads



eventually becoming virtualized. Cloud computing is a more specific style of computing that will beapplicable to specific workloads. Virtualization is a fundamental enabler to IaaS, and will be used toestablish private cloud services, public cloud services and interoperable hybrid cloud services. Effectively,all IaaS offerings will rely on VMs or container technology. In the last year, the installed base of servervirtual containers and VMs continued to growth significantly, due to:

Growth in workloads, including more core workloads

Continued rapid growth in customer adoption and penetration

Increased use of HVDs (on servers) — HVD VMs accounted for nearly 40% of server VMs in 2011

Increased use of cloud IaaS

Continued growth in midmarket enterprises

Maturity of competitive product offerings

Interoperability among service providers and enterprises is growing in importance, as enterprises planto build architectures that can enable workload migration to and from cloud providers, and hybrid cloudcomputing.

An x86 server virtualization infrastructure provides the foundation for new management andautomation tools, new security architectures and new process methodologies. Although thetechnologies in the x86 server virtualization infrastructure market are simply enablers, they are beingused by vendors to drive customers to higherlevel management and automation technologies. Choicesmade at the lower layers matter. While alternatives are beginning to emerge to enable heterogeneousvirtualization infrastructures, they are still immature and limited in functionality.

The market is becoming more competitive in terms of product offerings and of overarching visions forthe road map to cloud computing. VMware remains the market share and technology leader, but themarket continues to grow, and competitors have a growing share of the market. While the majority ofGlobal 1000 enterprises are heavily virtualized, a growing percentage have multiple virtualizationtechnologies in place. Many smaller enterprises and those in emerging economies are still early in theirvirtualization effort. These enterprises have several viable alternatives from which to choose. Inaddition, as the cloud computing paradigm continues to evolve, cloud service providers offering IaaSwant to make interoperability with their service offerings easy. A key trend among service providers is ashift to support better interoperability with existing enterprise virtualization infrastructures — in manycases, expanding their support for the same technologies that enterprises are using.

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