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Despite Microsoft's recent progress, VMware has made the most of its head start in the virtualization market. According to Gartner, at the end of 2008, VMware accounted for 89 percent of the virtualization market, compared to 7 percent for Microsoft and 2 percent for Citrix. Of course, Hyper-V has only been available since last July, and R2 looks poised to help Microsoft grab more customers.
At this point in time, however, Microsoft is aware that it can't beat VMware's technology, which is why the company is focusing on pricing and licensing concessions, said Paul DeGroot, an analyst with Directions On Microsoft, Kirkland, Wash. "One of Microsoft's primary objectives right now is to gain market share in the virtualization space before VMware attains Google-like stature in the market," he said.
In what's fast becoming a debate with religious fervor, VMware channel partners' stance is that Microsoft won't be able to use price as a market-conquering weapon in virtualization as it has done in other markets. Virtualization, they say, hasn't yet experienced commoditization, and companies that spend more for VMware don't experience buyer's remorse.
"I don't think you can look at cost in isolation. If a virtualized infrastructure is going to save your organization tens of millions of dollars over time, what cost is a few thousand dollars up front?" said Steve Kaplan, vice president of the data center virtualization practice at INX, a San Francisco-based solution provider.
Microsoft Hyper-V isn't as robust as VMware when it comes to enterprise virtualization deployments, and it's not a suitable option for complete data center virtualization, Kaplan added.
Still, the economy is playing right into Microsoft's hands, at least when it comes to companies that are dipping their toes into virtualization for the first time. That's because buying decisions that were previously made on technology are now being driven by financial concerns, according to Michael Cocanower, president of Phoenix-based Microsoft solution provider ITSynergy.
"The IT department may say 'We need VMware', but the executive suite is coming back and telling them to figure out how to do it with Hyper-V," Cocanower said.
Rand Morimoto, president of Convergent Computing, an Oakland, Calif.-based solution provider that has a staff of consultants with expertise in Hyper-V and VMware, sees that trend continuing. In the virtualization market, complexity and pricing are increasingly top-of-mind concerns for most companies, he said.
"VMware still accounts for 57 percent of my virtualization business, and I wholeheartedly support that customer base," Morimoto said. "But if a customer wants to switch, I'm not going to walk from the business."
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