Recently Gartner Group announced what they consider the top five server virtualization trends for 2012. In the brief analysis which we are sharing below, they emphasize that while server virtualization is maturing it is still pretty dynamic and ever changing, so much so that it is actively impacting their own decisions and guidance to their clients. As price and selection has become varied, it is important for Reflex to be diligent in providing the information and education our current and future customers need to make the best possible decisions on virtualization solutions for their environment. We thought it was an informative and encouraging piece to share with our own followers, along with our thoughts on the 2012 trends that Gartner has identified:
1) Competitive Choices Mature: VMware’s competition has greatly improved in the past few years, and price is becoming a big differentiator. Enterprises that have not yet started to virtualize (and they exist, but tend to be small) have real choices today.
We believe this growth in competition is great for customers and vendors. Not only are prices coming down, but customers now have more choice than ever, and are not beholden to VMware’s architecture or pricing model. We see customers making much more informed decisions, selecting solutions that deliver the breadth of functionality they need not just today, but for their future plans to grow and scale their infrastructure and develop private and hybrid cloud solutions at a reasonable price.
2) Second Sourcing Grows: Existing VMware users may not be migrating away from VMware, but they’re concerned with costs and potential lock-in. A growing number of enterprises are pursuing a strategy of “second sourcing” – deploying a different virtualization technology in a separate part of the organization. Heterogeneous virtualization management is mostly aspirational, although there is interest.
We agree that many users are currently looking for additional solutions for virtualization technology and the lack of management is a current obstacle for these end users. Specifically, management solutions from the individual hypervisor vendors can be problematic for the growth of second sourcing. Cross-hypervisor management will become essential within the next 12-18 months as we see more diversification of basic virtualization technology. The integrated management platform strategy vs. a multi-point solution strategy becomes key when expanding consistent management capabilities across multiple hypervisors like VMware, Red Hat KVM, Microsoft Hyper-V, etc. to enable holistic management of the virtual and cloud infrastructure. We believe that the management layer will be the great equalizer as this market progresses. Red Hat and Microsoft are beginning to embrace the ecosystem in a way that makes holistic management a real possibility. We expect to be able to provide significant parity for VMware, Red Hat, and Microsoft as we enter 2013. These advancements in the management market will help accelerate the adoption of other hypervisors and bring true flexibility to the market place because the management technology will provide the features that may be lacking in some of the hypervisors.
3) Pricing Models in Flux: From expensive hypervisors to free hypervisors to core-based pricing and now memory-based entitlements – virtualization pricing has always been in flux, and trends toward private and hybrid cloud will ensure that virtualization pricing will continue to morph and challenge existing enterprise IT funding models.
We believe this is also a positive for customers, who now have alternatives to VMware’s pricing. Customers do not like to be negatively impacted by a pricing model that penalizes customers for gaining the efficiency and benefits from virtualization. Customers will be very mindful of pricing scenarios and choice of vendor as more continue to build out private and hybrid clouds. These pricing practices serve to artificially stunt the growth of virtualization as customers pause to understand the financial impact. As the management technologies become a larger portion of the budget allocation for virtualization, it is very important to make sure that the pricing model allows the customer to achieve the scale in the infrastructure as well as benefit from its efficiency and agility. Consumption based pricing models are difficult for most enterprises to plan and execute today. This may change over time, but the key is to find a way to allow the customer to grow its usage of the solution as it grows value in their enterprise without financial penalty.
4) Penetration and Saturation: Virtualization hitting 50% penetration. Competition and new, small customers driving down prices. The market is growing, but not like it used to, and vendor behavior will change significantly because of it. And don’t forget the impact on server vendors – the next few years will prove to be a challenge until virtualization slows down.
We actually see the market for virtualization management growing just as fast, if not faster, than it has in the past. While straight server virtualization purchases may be slowing, customers are wising up to the fact that they need to manage these environments as well, if not better, than they have managed their physical environments in the past, if they want to really get the benefits virtualization promises. We believe the management market has tremendous growth ahead, and will provide most of the value added features that deliver on the promise of agile and elastic datacenters.
5) Cloud Service Providers Are Placing Bets: IaaS vendors can’t ignore the virtualization that is taking place in enterprises. Creating an on-ramp to their offerings is critical, which means placing bets – should they create their own standards (perhaps limited their appeal), buy into the virtualization software used by enterprises (perhaps commoditizing themselves), or build/buy software that improves interoperability (which may or may not work well)? Not an easy choice, and winners and losers will being determined.
Many of our customers, who are cloud service providers themselves, realize that they must provide solutions that 1) customers are familiar with, and 2) can be integrated into a broader data center vision that includes both private and public cloud, leveraged for different needs of the business. Developing a platform that enables these two things is key to their success. Service Providers have struggled to get enterprises to buy into the promise of a more efficient cost model using the public cloud. This is primarily because they do not want to let go of the true business critical applications. The private cloud is growing in popularity, and that is being driven by the technologies being delivered by a new generation of software companies that spend every day trying to solve these problems. The service providers are going to have to embrace these technologies/vendors and work with them in a meaningful way in order to get true enterprise buy in for use of cloud services.
As virtualization continues to mature and shape how IT functions, organizations should become educated on the virtualization options available and look for a strong management solution that offers flexibility, scalability and comprehensive capabilities that evolve with the dynamic nature of the virtualized data center.
Preston Futrell is President & CEO of Reflex Systems.