Virtualization Market Strong but Slowing, Report Says

IDC study depicts a slowing worldwide market for virtualized servers; Microsoft and interoperability may be the hot topics for 2009

An IDC study released on Thursday depicted a slowing worldwide market for virtualized servers. However, Microsoft and interoperability may heat things up again in 2009.

Microsoft Hyper-V, in its first quarter of availability, garnered a 23 percent share of all new shipments of virtualization software. The hypervisor, which is built into Windows Server 2008, can potentially lower the cost of ownership for virtualization adopters, according to Microsoft's promotional materials.

The decline in growth rates may be attributable to a maturation of the virtualization market. In particular, the large-business, high-volume consolidations that fueled virtualization during the past couple of years have all been consolidated, according to the report, "Worldwide Quarterly Server Virtualization Tracker."

"The low hanging fruit in the x86 server virtualization market is starting to dry up," said Brett Waldman, IDC research analyst for system software, in a prepared statement.

Waldman suggested that virtualization platform providers should market more toward "mid-sized" companies.

The IDC report noted that VMware continues to lead the virtualization licensing charge with a 78 percent market share.

The virtualization market has been sizzling since mid-decade. Worldwide license shipments increased 53 percent from second-quarter 2007 to second-quarter 2008. First-quarter reports for 2007 to 2008 indicated a whopping 72 percent increase.

Overall, the virtualization market has grown from approximately $560 million in 2005 to a forecasted $2.7 billion in 2009, according to IDC.

Virtualization vendors may be moving toward achieving greater interoperability. On Tuesday, Boston-based Citrix Systems released a preview of Project Kensho, a multi-hypervisor toolkit for portable virtual machine appliances.

The toolkit is based on the Open Virtualization Format (OVF), a virtualization standard developed jointly by VMware, Citrix, Microsoft and Novell. The standard is considered critical in the evolution of virtualization by providing a format for interoperability.

-- Herb Torrens