09 Apr 2014
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Gartner: Server virtualisation on the rise...

The level of server virtualisation usage continues to rise.

Gartner survey results show that the majority of server workloads are virtualised - an average of 74.9 percent globally as of mid-2013 - and even higher in New Zealand.

We continue to forecast that the average server virtualisation level will reach 80 percent by 2015, although the rate of increase in adoption will slow, as the "easy targets" become harder to find within organisations.

VMware, followed by Microsoft, dominates the enterprise market globally but the server virtualisation market remains challenging to measure.

VMware has long been associated with x86 server virtualisation, in large part because it helped establish the use of server virtualisation on industry-standard x86 hardware platforms.

Today, it has about US$5 billion in annual revenue and was the main choice for almost 80 percent of organisations that responded to a recent global Gartner survey.

While somewhat late to x86 server virtualisation, Microsoft is starting to close the feature gap and is gaining ground. Gartner's research shows Microsoft Hyper-V as now being the primary choice for more than 11 percent of organisations surveyed.

This suggests that the choice between Microsoft and VMware is becoming increasingly competitive. While acquisition cost often favours Microsoft, uptime and operational management favour VMware.

When we asked survey respondents about the primary hypervisor used, it showed VMware's dominance and the limited diversity of players used in the enterprise.

Of those surveyed, 79.3 percent used VMware, with 11 percent using Microsoft. Xen was the third most popular hypervisor after VMware and Microsoft.

The survey also highlighted the low level of enterprise usage of open-source software (fewer than 4 percent of respondents) as the main hypervisor.

Microsoft Hyper-V tends to have higher penetration within small versus large organisations. VMware has the opposite: greater penetration in midsize and large respondent organisations.

During the past 18 months, an increasing number of Gartner clients have been asking about competitors to VMware, notably Microsoft, but also Oracle and Red Hat.

To a certain degree, this is a function of concerns about VMware pricing and a warning sign that VMware's market position will come under increased pressure.

In 2014 and onward, as greater numbers of organisations refresh/upgrade their server environments to Windows Server 2012, the threat of increasing competition and the possibility of a lower licensing cost for x86 server virtualisation will begin to play a larger role.

However, Gartner continues to see few actual customer conversions from VMware (as the main vendor) at this time, and a proportion of such discussion must be considered as a negotiation tactic.

Given the almost universal appeal and applicability of x86 server virtualisation, it is somewhat surprising to note the differences in virtualisation levels by industry vertical among respondents.

On average, the manufacturing and natural resources sector comes out as the most highly virtualised, followed by government, the services sector and banking.

Looking ahead, we expect to see an increase in private cloud deployments, rising from just over one-third of organisations in 2013.

New Zealand remains well-positioned to retain a position of global leadership, but success will come from choosing the right workloads for private cloud rather than from broad-scale deployment.

By Michael Warrilow, research director, Gartner

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