Virtualization Space Opens Up

VMware, the 800-pound gorilla that has dominated the virtualization space for years, is finally facing some competition. While some of it is coming from —who else? —Microsoft, the competition is chiefly from an open-source version of virtualization called Xen.

But just how stiff is the competition? The answer depends on whom you ask and whether they have a vested interest in promoting open-source technology or attacking it.

Still, no matter how you slice it, the competition is good for solution providers because it gives them choices in culling together virtualization solutions for customers, say channel insiders.

"VMware is, by far, the best engine for generating the virtual layer, but the open-source players are catching up," said Mike Reilly, president of Foedus, a solution provider in Portsmouth, N.H., that works with a variety of virtualization technologies.

"Open-source solutions have lagged behind proprietary solutions, but they are making up ground," said John Humphreys, an analyst at market research company IDC.

The worldwide market for x86 virtualization solutions has been growing rapidly since 2003 when it reached $205 million, according to IDC. Last year, the number topped $800 million, and IDC projects it will reach $1.8 billion by 2010.

So what exactly is virtualization? It is software that separates the physical hardware from the operating system to deliver a virtual computer system.

Virtualization software simulates a real computer and delivers a lot of flexibility by hiding the physical characteristics of computing resources from the way in which other systems, applications or users interact with those resources.

The software can make a single server, operating system, application or storage device appear to function as multiple logical resources. Conversely, it can make multiple physical resources appear as a single logical resource.

Introduced in the 1960s to partition mainframe software, virtualization lost luster with the advent of the PC. But in recent years, it has emerged as a way to address new computing challenges.

The technology's appeal to solution providers is that it gives them alternatives they can present to budget—conscious customers that need more computing capacity for their business objectives. Providers have access to numerous solutions at different prices for customers seeking to consolidate servers, create virtual infrastructures, develop business continuity plans and achieve other goals.

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Open source rising

Late last year, Virtual Iron Software, of Lowell, Mass., and XenSource, of Palo Alto, Calif., introduced low-cost enterprise-class virtualization platforms that support Windows and Linux.

The platforms are designed for all primary virtualization uses: server consolidation, development/test/staging environments, the deployment of virtual appliances, rapid provisioning of virtual infrastructure, high availability/business continuity and dynamic capacity management.

"Up until now, cost was the single-biggest hurdle for adoption of virtualization," said Mike Grandinetti, vice president and chief marketing officer at Virtual Iron. "VMware, today's leading proprietary solution, costs more than the price of an industry-standard server."

Next Page: The price leader