Virtualisation to exhibit more vendor lock-in, higher prices

By Michael Warrilow and John Brand, Hydrasight
Monday, 27 July, 2009

While VMware is increasingly viewed as the ‘de facto’ choice in server virtualisation for the enterprise, Hydrasight notes that VMware’s ascendancy shares many similar characteristics to the rise of Microsoft Windows. These include a (relatively) ‘closed’ approach, relatively rapid/widespread enterprise adoption and an often hefty total cost. We therefore caution organisations to ensure they plan enterprise virtualisation deployments accordingly, aware of the full range of potential implications (e.g., cost, vendor lock-in, influence over technology strategy). Looking forward, we foresee that many enterprises in Asia Pacific (and elsewhere) will increasingly have their server strategy controlled by both Microsoft and VMware.

Hydrasight research continues to show increasing adoption, among enterprises in Asia Pacific (and elsewhere), of server hardware virtualisation (refer "Refining the virtualisation landscape"^). Moreover, we note VMware (ESX/ESXi) continues to be the preferred and/or default choice—among enterprises—such that it undoubtedly dominates the server hardware virtualisation market.

Similarly, we note the (erroneous) perception that virtualisation technology is now either ‘free’ or ‘commodity’ (refer "Commodity is not (necessarily) a dirty word"^). Whereas the hypervisor itself may be free of charge, the utilities and management tools required to implement and manage VMware in production environments are not. Examples of features, utilities and tools from VMware include Consolidated Backup, High Availability, AppSpeed, Lab Manager, Distributed Resource Scheduler and Distributed Power Management amongst others. Moreover, our research places the (currently discounted) list price for such utilities as ranging from US$2,750 – US$6,000+ per hypervisor instance.

Perhaps most importantly, we note that most of VMware’s products are now management software applications aimed primarily / exclusively at administering a VMware-centric ‘stack’.

In many regards, we note that this position has many similarities to the use, and manageability, of matured Microsoft software within enterprise organisations (refer "Manageable systems are better than management systems"^). To elaborate, in the context of VMware, the risk of industry-dominant or proprietary control and/or lock-in is significant and growing –and rapidly. In other words, VMware’s dominance is in large part due to its perceived commodity status yet the total ownership cost remains hidden or (incorrectly) assumed to be low. Notable examples, in the Microsoft context, include Windows and Exchange plus the Systems Centre family and associated ‘management packs’.

We therefore believe organisations in Asia Pacific (and elsewhere) must ensure they are aware of, and plan appropriately for, the relevant benefits of virtualisation (refer "Building the business case for server virtualisation"^) as well as the risks. Moreover, our general position on virtualisation also applies to VMware. As we have previously indicated, Hydrasight observes a growing number of enterprise vendors now promoting and providing hypervisor technologies. These include Microsoft, Citrix, Oracle and Sun among others. We believe this situation will result in an increasing requirement for heterogeneous hypervisor management (HHM) beyond 2012, and the potential justification for further investments in IT management software (refer "The inevitability of heterogeneous hypervisor management"^).

Organisations must therefore ensure their technical / solution architectures reflect the potential risks, which include siloed / technology-specific IT administration, leading to further IT operational expenditure and overheads, as well as reduced control of vendor sourcing and strategy options. As the adoption of server virtualisation continues to increase, Hydrasight foresees that enterprise server strategies will increasingly be subject to consideration of both Microsoft and VMware within the majority of enterprises. 

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