Magic Quadrant for x86 Server Virtualization Infrastructure

The x86 server virtualization infrastructure market includes all x86-based workloads (i.e., application, Web and database servers; hosted virtual desktops [HVDs]; file, print and security servers) deployed on standard x86-based physical servers.

Solutions for this market leverage:

• Hypervisors to create virtual machines (VMs)
• Shared OS virtualization technologies (also called "containers")
• Server virtualization administrative management (base frameworks)
• Server virtualization embedded management (live migration and basic automation of administrative management functions)

Not included are higher-level management functions, such as operational automation tools that deal with virtual resources, application performance tools that leverage and monitor virtualization, disaster recovery tools that leverage virtualization, desktop provisioning and brokering software, etc.

Source: Gartner (June 2012)

Vendor Strengths and Cautions

Citrix Systems

Citrix is leveraging its position in desktop virtualization and new focus on cloud computing infrastructures to grow its foothold in the server virtualization market as the third-place vendor in terms of market share. Unlike VMware and Microsoft, Citrix's server virtualization business is driven almost entirely by its strength in desktop virtualization. The HVD opportunity now accounts for more than one-third of x86 server virtualization infrastructure VMs. Citrix XenDesktop is the leading desktop virtualization solution in the market, and the majority of its HVDs are hosted on XenServer. XenServer tends to be the desktop virtualization host of choice for smaller enterprises that use XenDesktop. This market is not without competition. VMware is the primary desktop virtualization host, and Microsoft is a growing factor.

However, demand for XenServer for server workload virtualization has declined, especially in enterprises. Growth of service providers is offsetting some of that decline. Some service providers are converting from open-source Xen to XenServer (where Citrix hopes to upsell additional Citrix products), while others are deploying CloudStack as a cloud management platform, often leveraging XenServer. Regardless, the service provider opportunity for XenServer will be a challenge to monetize, and not nearly as important as desktop virtualization.

In the past year, Citrix released XenServer version 6, including scalability, management, storage and memory improvements. Importantly, Citrix has made key strategic changes in the last year, focusing more on multihypervisor cloud infrastructures (based on its acquisition of Cloud.com), which may help promote use of XenServer, but does not require it.

Key to Citrix's strategy is its ability to leverage a very large and loyal customer base (of more than 200,000 customers) of all its products. These customers typically use a variety of Citrix products/technologies, with XenApp as the product holding most of the mind share. Although Citrix has been successful selling XenApp, the company recognizes that the market opportunity for the desktop, by selling XenDesktop, is much larger than XenApp can address. Therefore, Citrix requires a position within the HVD market to grow its installed base.

Citrix offers XenDesktop as an umbrella set of technologies to deliver the desktop. It includes XenApp, Provisioning Services, XenClient (a Type 1 hypervisor for PCs) and XenServer. This rapid adoption of XenDesktop has carried XenServer into some VMware-centric organizations. While VMware vSphere continues to be a broadly used hypervisor in XenDesktop deployments (especially in large enterprises), many enterprises are beginning to question the viability of supporting a different VM infrastructure when they could reduce costs by using XenServer or Hyper-V. This is certainly a trend that Citrix hopes to exploit for desktop virtualization and cloud infrastructures, and one for which Citrix has had some success, especially in smaller companies.

In server virtualization, Citrix and Microsoft have a somewhat complicated relationship. While Citrix supports Hyper-V and has a long-term partnership with Microsoft, winning at the desktop layer is important if Citrix will expand its management, automation and cloud business further. As a result, Citrix's go-to-market strategy regarding how it competes with/complements Microsoft remains confusing for many customers and channel partners. Regardless, it is apparent that Citrix is willing to sacrifice the server platform to Microsoft and Hyper-V to grow its desktop virtualization business. Marketing and sales execution remain key future success factors for Citrix.

Furthermore, Citrix has expanded on its vision for private and public cloud computing with CloudPlatform, its commercial offering of CloudStack (which Citrix contributed to the Apache Software Foundation after acquiring Cloud.com). One of Citrix's objectives is to offer a highly scalable and reliable cloud computing environment for service providers and enterprise customers, competing against the better-known OpenStack project. While it is still early in the process, Citrix has had notable service provider customer success with CloudPlatform, which is driving some XenServer growth. Importantly, CloudPlatform supports several hypervisor technologies in addition to XenServer (in homogeneous or heterogeneous environments).

While server virtualization remains important to Citrix, the company's business focus is moving further up the stack and isn't reliant on winning at the hypervisor layer. During the past year, we have seen less emphasis by Citrix in promoting and positioning XenServer as a stand-alone virtualization offering; rather, Citrix has positioned XenServer as an ingredient to broader solutions specifically targeted at the desktop and cloud markets.

Strengths

• Rich product capabilities for relatively low cost (starting with the free-of-charge XenServer edition)
• Large opportunity in the cloud service provider market that relies heavily on open-source Xen today
• Bundling of XenServer with other Citrix products, and ability to leverage its desktop virtualization market position and installed base for XenServer sales
• Very large and loyal channel

Cautions

• XenServer marketing execution and reach
• Open-source software (OSS)-based competition (especially from Red Hat RHEV and KVM)
• Continued market and strategy complexity in its partnership with Microsoft (specifically with respect to XenServer)

Microsoft

Microsoft has been in the market with Hyper-V and System Center Virtual Machine Manager (VMM) for four years. There have been three major deliverables in that time: (1) Hyper-V (and System Center 2008) in mid-2008, (2) Live Migration and Cluster Shared Volumes in Windows Server 2008 R2 and System Center 2008 R2 in late 2009, and (3) Dynamic Memory in Windows Server 2008 R2 Server Pack 1 (SP1) and System Center 2008 R2 SP1 in early 2011 (important for HVD deployments). Microsoft has not updated Hyper-V in the past year, but a major release — Windows Server 2012 — is expected in late 2012. System Center 2012 VMM was released in April 2012, but too late for evaluation in this research.

Microsoft has been gradually closing the functionality gap with VMware in terms of the hypervisor and basic administration capabilities. However, VMware had a six- to seven-year head start, and the cadence of Microsoft's enhancement delivery has been relatively slow. This Magic Quadrant is based on Windows Server 2008 R2 SP1 and System Center 2008 R2 SP1 — both of which are incremental enhancements to major releases delivered four years ago. The market has been moving quickly, beyond basic virtualization and virtualization management, and favoring solutions that can be more fully automated and provide self-service (toward private cloud computing). This combination is making it difficult for Microsoft to take significant market share. The majority of Microsoft's success has been with midmarket companies (especially those with fewer than 1,000 employees) that are relatively new to virtualization (where they are winning 30% to 40% of the time), and in peripheral, branch or store roles in larger enterprises (that are primarily VMware customers). There are a few exceptions where Microsoft has converted large VMware installations; the primary driver for those conversions was VMware's relatively high price.

Hyper-V in Windows Server 2008 R2 SP1 and VMM in System Center 2008 R2 SP1 can meet the requirements of most midmarket deployments, and even for large enterprises that are just starting to make plans for private cloud pilots. Microsoft still needs to overcome an installed base that is usually well-entrenched with VMware vSphere and vCenter management and automation tools. Microsoft's approach of "surrounding" VMware with heterogeneous management capability in System Center VMM has had marketing appeal, but few customers have leveraged it.

One of Microsoft's challenges is to create a broader service provider appeal for Hyper-V. Until recently, Microsoft's service provider focus was for hosters to use Hyper-V for more traditional consolidation. Microsoft's Azure service used a modified Hyper-V, and would not support standard Hyper-V Virtual Hard Disks (VHDs). Two shifts relative to service providers are coming: (1) Microsoft Azure's VM Role (in beta for the past two years) likely will support Windows Server 2008 R2 VHD images, and (2) System Center 2012 will make it easier for service providers to create infrastructure as a service (IaaS) cloud offerings based on Hyper-V. The strategy is becoming clear, but Microsoft's issue is timing. VMware has been promoting vSphere for cloud computing infrastructures for several years. However, in the past year, Microsoft increased its service provider program around Hyper-V use from dozens of providers to several hundred. A test for Microsoft's potential in the x86 server virtualization infrastructure market will come during the next year, as the company delivers what it claims to be major Hyper-V enhancements in Windows Server 2012, and as System Center 2012 is deployed.

Strengths

• Administrative environment that is familiar to Windows administrators
• Installed base of Windows, especially a large number of Windows-only enterprises
• Strength of solution for midsize enterprises and low price
• Company financial strength

Cautions

• Difficulty converting or surrounding a strong VMware installed base, especially in large enterprises
• Competing with VMware for channel and service provider influence
• Relatively slow cadence of delivery of enhancements (major release every four years)

Oracle

Oracle VM is Oracle's implementation of the Xen hypervisor that also leverages intellectual property that Oracle acquired from Sun Microsystems and Virtual Iron. Oracle has integrated these technologies into a more coherent and packaged solution with the Oracle VM 3.1 release. Oracle is converging on Oracle Enterprise Manager 12c to manage its virtualization and infrastructure portfolio. This includes Oracle VM (an x86 architecture product, based on Xen), Oracle VM Server for SPARC (based on Sun LDOM technology), Oracle Solaris Containers, Oracle Linux Containers (currently offered as a technology preview only) and potential software appliances using Oracle VM, storage and other related virtualized infrastructures. This management unification is an important direction and foundation for Oracle virtualization and other products, because it builds an integrated approach to selling virtualized database management system (DBMS) and application server hardware, software solutions, attached storage and Oracle-based management solutions. Among competitive x86-hypervisor-based solutions, Oracle has chosen to certify its software solely on Oracle VM. Most of the customer references that Gartner investigated stated that certification and licensing were their primary reasons for choosing Oracle VM.

In addition, Oracle favors Oracle VM for software licensing and pricing — for example, with processor pinning (allowing the specification of a limited number of processors being used by a VM, which can reduce software costs when live migration is not required). Oracle's corporate strategy is "integrated but open," which encompasses the company's infrastructure stack. While Oracle solutions are optimized to work with one another, they still work with supported third-party vendors. Oracle VM is a solid and maturing solution for Oracle-centric architecture, and is becoming a valuable component of an integrated Oracle-managed architecture as more management features are added. Gartner is receiving a growing number of inquiries from clients considering and using Oracle VM. Several clients have reported that previous difficulties around live migration and storage recovery have generally been resolved.

Oracle Solaris Containers offer shared OS virtualization capabilities for tactical x86 deployments. Containers provide differentiated benefits for x86 Oracle users — higher virtualization density and reduced operational costs due to fewer OS instances, something that hypervisor-based solutions cannot do. In this sense, Oracle Solaris Containers alongside Oracle VM can be a complementary solution, targeted at different application requirements.

Strengths

• Preferential licensing and certification of Oracle software using Oracle VM
• Oracle's overall software installed base and financial strength
• Strong solution in Oracle managed stack, including many ready-to-use VM and application templates
• Solaris Containers complements Oracle VM as a lightweight alternative to a hypervisor

Cautions

• Oracle still focuses on an "Oracle only" virtualization market and user requirements
• Oracle broad adoption is still slow, although gaining share in Oracle Accounts

Parallels

Parallels Virtuozzo Containers is a shared OS virtualization solution available for Linux and Windows. Parallels is a major driving force behind OpenVZ, which is essentially the foundation of Parallels Virtuozzo Containers, and an important source of potential migrations to Parallels Virtuozzo Containers. Parallels Virtuozzo Containers allows multiple applications to run in lightweight, separate containers offering processor affinity and memory protection and isolation. Compared with hypervisor-based solutions, Parallels Virtuozzo Containers can reduce OS software and administration costs in much higher densities. Parallels also offers portability and live workload migration. The whole architecture of containers enables a workload and container to spin up faster with less performance overhead than VM solutions.

Originally, Parallels Virtuozzo Containers focused on the service provider market, which has remained a loyal and viable community for Parallels. With the growth of enterprise virtualization, Parallels entered that market several years ago, without much success. Since last year's Magic Quadrant analysis, Parallels has continued to shift its focus exclusively to service providers. This has been a popular decision among its service provider customers, who felt that Parallels had been less responsive to their requirements a few years ago, but who now say responsiveness has improved considerably.

As cloud computing evolves, Parallels is positioned well with service providers (and, through them, midmarket enterprise customers), but has yet to become a factor with large enterprises. Its lack of focus on on-premises enterprise virtualization may make growth into large enterprises difficult. Parallels hopes that a broad shift to cloud computing will bring more large enterprises to service providers, thus building cloud services based on Parallels' software.

For now, Parallels offers the best solution for service providers building high-density, but isolated, solutions around common workloads, such as Web serving. Parallels has a challenge and an opportunity with OpenVZ — expanding the use of containers, especially by service providers, but adding enough value to monetize that through Parallels Virtuozzo Containers (and other Parallels cloud service delivery software).

Parallels Server 4 Bare Metal, which is based on a hypervisor architecture, is not covered in this Magic Quadrant, because Gartner has not found enough references using it. However, Parallels' success with containers, common management and automation tools creates an opportunity for expansion with Bare Metal into the service provider market.

Strengths

• Unique and innovative container-based solution, including live migration and increased isolation
• Parallels Virtuozzo Containers is the leading product with a containers-based solution for service providers
• Reduced administrative and OS software costs, and higher density compared with hypervisor-based solutions

Cautions

• Importance of an enterprise customer base (and on-ramp) as hybrid cloud computing evolves
• Being able to monetize open-source OpenVZ container growth
• Dependence by many workloads on a single host OS

Red Hat

Red Hat has made some progress year over year in the Magic Quadrant, but only incrementally. On the positive side, Red Hat delivered key virtualization functionality, such as live migration, as part of its RHEV 3 release in early 2012. This allows Red Hat to more effectively market a multipronged strategy based on RHEL as the most popular Linux OS, integrated with KVM as a kernel-embedded Linux hypervisor and RHEV as the ecosystem. KVM is now proven to be one of the best performing hypervisors in the market. Its integration with the Linux kernel presents a ready bridge for the majority of Linux OSs not yet virtualized by KVM or Xen, or deploying Linux OS instances on VMware. Gartner estimates that 35% to 45% of Linux instances are currently virtualized.

However, its current improved execution on product and technology alone will not be sufficient to lift Red Hat into the Leaders quadrant without a more robust and comprehensive marketing effort. Red Hat was restrained by product limitations, but 2012 represents a watershed year for Red Hat to swing the massive Linux installed base to RHEV, especially since every Linux has the KVM hypervisor as part of the kernel. While most OEM vendors — such as IBM, HP and Dell — have acknowledged KVM as their strategic Linux hypervisor of choice, most of the vendors did not proactively market KVM without a management ecosystem to compete against VMware. Our discussions with Linux users have found most are satisfied running Linux instances on VMware. They have achieved good virtualization results; switching to KVM/RHEV would represent seeking budget approval to test and deploy new applications, migrate VMs from VMware and deal with territorial control issues staked out by VMware administrators. Red Hat's philosophy is to drive management through open-source software (OSS) products and enable third-party products through open interfaces (e.g., oVirt). These efforts are still early stage, and some users (based on Gartner inquiries) have balked at the perceived high VM guest subscription pricing. Red Hat has been reluctant to yield on pricing, to maintain its margins and financial consistency.

As a consequence, Red Hat has had difficulty generating momentum and enthusiasm from the enterprise IT organizations, especially ones with limited skills, comfortable and entrenched alternatives (either VMware or Microsoft), or price resistance.

There have been other OSS Linux alternatives, such as Oracle VM (based on Xen), Citrix (XenServer), Parallels (Parallels Virtuozzo Containers) and SUSE (Xen and KVM). We expect Linux Containers to appear later this year in production proof of concepts that will obviate the need for a hypervisor, especially in hosted environments seeking low overhead and high multitenancy.

Adding to the challenge is Red Hat's effort to drive cloud adoption for RHEL with cloud provisioning and management. Red Hat uses KVM/RHEV as an important foundation for cloud infrastructure enablement. This strategy implies user acceptance of RHEV with the KVM hypervisor, but proven cloud-ready implementations must accelerate. Competition in cloud is mounting from free-of-charge OSS alternatives, such as Ubuntu and Xen, or from Parallels in hosting environments. As a result, Gartner believes that marketing execution and understanding must be better addressed for Red Hat to further improve its positioning on the Magic Quadrant for x86 Server Virtualization Infrastructure.

On a tactical level, users have indicated that the KVM experience with Red Hat tools has been acceptable. But on a strategic level, few users seem so assured as to declare that large parts of their IT infrastructure and services will standardize on RHEV. Production versions shipped in February 2012. Red Hat still has catching up to do vis-a-vis VMware in manageability (e.g., storage management). Red Hat is counting on its acquisition of Gluster to pave new virtualization opportunities in large file-based applications and clusters.

Gartner's client contacts continue to reveal cautious interest in Red Hat virtualization and comprise predominantly proofs of concept. The most friendly to Red Hat virtualization will be strongly independent Linux-based organizations, academic and government institutions, and technical computing centers. In commercial businesses, clients running RHEL often express some interest in virtualization, but have made commitments to VMware (or others) and are cautious about making additional commitments that expand required toolkits and administration skills.

Strengths

• Strong and loyal RHEL customer base opportunity (mostly unvirtualized)
• Integrated hypervisor with Linux kernel (e.g., leveraging mature scheduling)
• Performance and security
• Ease of access and installability
• Leadership of the core KVM OSS development community

Cautions

• Limited sales and marketing execution
• The majority of virtualized RHEL instances are running on VMware
• Limited ecosystem of tool vendors
• RHEL VM guest pricing tiers are inhibitors to rapid market expansion
• Limited production use and experience with RHEV 3

VMware

VMware has maintained its strong functionality lead with the introduction of vSphere 5.0 in 2011, including a new high-availability architecture and increased scalability. VMware continues to have dominant market share, and customers remain satisfied with product capabilities and vendor support. However, concern over vendor lock-in is increasing. Also, VMware's pricing change toward virtual memory entitlements has raised concerns about pricing model volatility and pricing disparity between VMware and the competition. There has been growing interest during the past year in competitive evaluations and creating a separate virtualization footprint with a different technology — typically Microsoft Hyper-V, although Oracle VM use is also growing among VMware customers. However, Gartner sees very few actual customer conversions from VMware at this point.

None of this has slowed VMware's rapid growth, as the total number of server workload VMs deployed during the past year is 30% higher than those deployed a year ago, and HVD workload VMs is 50% higher. While VMware's share of that growth is strong, it is not the same 100% market share that VMware enjoyed in 2005. Competition has been improving.

VMware's overall vision is synchronized with the market interest (especially large enterprise interest) in private cloud computing, and hybrid cloud computing (federating between private and public cloud services using vCloud Director). While service providers are concerned with the potential of commoditization created by a common cloud infrastructure, the cost of VMware, and the relative immaturity of vCloud Director compared with their enterprise and scaling requirements, these service providers are very interested in interoperability with the large enterprise installed base of vSphere. The number of service providers offering vSphere-based services continues to grow.

On the desktop, VMware continues to expand and deliver on its View and ThinApp offerings. The integration of View and ThinApp has provided customers a fairly comprehensive solution that enables clients to scale HVD deployments to projects that are larger and more complex than prior iterations of the product.

With respect to the growing midmarket business, where high-end management and automation features are less critical, VMware has retained a strong market share. (Gartner surveys consistently show that 60% to 70% of midmarket companies, between 100 and 1,000 employees, tend to use VMware.) As Microsoft gains momentum, price — at least in Microsoft-centric enterprises — may make it difficult for VMware to retain that share. As VMware tries to push virtualization to the more mission-critical workloads, it will face a strengthening Oracle VM solution, at least for Oracle-based software. While Windows-based workloads have become heavily virtualized, there is still quite a bit of opportunity for Linux-based workloads. (Gartner estimates that Windows is 50% to 60% virtualized, while Linux is 35% to 45% virtualized.) Citrix, Oracle, Red Hat and open source could make VMware's expansion difficult.

VMware's primary market issues are price and the interest in heterogeneity. VMware depends on vSphere revenue as it expands into higher-level management and automation software, but it may need to make adjustments if customers look at the competition more seriously during the next year. On heterogeneity, while few customers are heterogeneously managing VMs today, the interest is there, which is a primary differentiator touted by Microsoft with System Center VMM. VMware has a technology preview called the vCenter XVP Manager and Converter, which allows for some basic Hyper-V management (introduced in February 2011). That technology preview may need to become supported functionality for VMware to fight off the market perception that it is "closed."

Strengths

• Virtualization strategy and road map that lead to private and hybrid cloud computing
• Technology leadership and innovation
• High customer satisfaction
• Large installed base (especially among large enterprises), and a large and growing number of service providers using vSphere (enabling choice of service providers)

Cautions

• Business model depends on vSphere revenue to expand and invest in adjacent markets
• Maintaining high revenue growth in a more product- and price-competitive market that is already 50% penetrated
• Focused homogeneous virtualization vision in a market where customers are concerned about lock-in, and service providers want differentiation

Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

Added

None

Dropped

None

Vendors that were eligible for inclusion in this Magic Quadrant met the following criteria:

• They must provide x86 server-based solutions to virtualize applications from OSs, or OSs from x86 server hardware, using:
  • Hypervisors
  • Container technology
• They must provide basic administrative tools for those solutions:
  • Administrative management frameworks/suites for hypervisors/containers
  • Embedded virtualization management technology (e.g., live migration)
• They must have at least 100 organizations using their generally available products as of 1 March 2012

Open-Source Communities (e.g., Xen and KVM Hypervisors) Versus Vendor-Embedded Open-Source Software Business Models

The x86 server virtualization infrastructure Magic Quadrant includes only commercial vendor-based offerings, and not individual positions and evaluations for OSS projects, such as KVM and Xen. The omission of Xen and KVM as OSS projects follows the same decision used in the 2011 Magic Quadrant (see "Magic Quadrant for x86 Server Virtualization Infrastructure"). Open-source projects would be penalized in the Magic Quadrant as a consequence of being a community-sponsored development, compared with the specific financial and marketing goals of vendors using the same underlying technology. Nevertheless, they are represented within commercial vendor offerings such as Citrix (Xen), Oracle VM (Xen) and Parallels (containers).

External service providers (ESPs), startups and entrepreneurs who have the necessary in-house skills can use open source to develop, test, configure, build and maintain their own environments. Cloud service providers are more likely to have the technical skills and shave margins in their services and product offerings to keep costs low, and they will likely develop and deploy their automation tools on a license-free OSS version of the hypervisor (e.g., Amazon and Google).

Users have the choice of selecting either vendor-specific implementations of virtualization or OSS-community-supported projects, including the types of virtualization (OS-hosted versus hypervisors) inclusive of monitoring and management tools, or a build-your-own approach, with self-maintenance or support of service providers. The self-maintenance and integration approach avoids subscription support licenses and vendor dependencies, but will add to internal support costs if skills are minimal or infrastructures are poorly implemented, resulting in more-frequent outages and downtime.

Evaluation Criteria

Ability to Execute

We evaluated technology providers on the quality and efficacy of the processes, systems, methods and procedures that enable IT provider performance to be competitive, efficient and effective, and to positively affect revenue, retention and reputation. Ultimately, technology providers are judged on their ability and success in capitalizing on their vision.

Ability to Execute in server virtualization is not simply about product features, but also about maintaining a constantly changing business model in a dynamic trend. Good products could fail, and poor products could be successful, based on effective vendor execution.

Product/Service: Core goods and services offered by the technology providers that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets and skills, whether offered natively or through OEM agreements/partnerships. Key factors that are evaluated include the range of OSs and applications supported; scalability and efficiency; elasticity; maturity; embedded resource management; management features to reduce administrative burden; ability to administer the holistic, virtualized ecosystem; administrative scalability; and integration with third-party enterprise management providers.

Overall Viability (Business Unit, Financial, Strategy, Organization): An assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue to invest in the product, continue offering the product and advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The technology provider's capabilities in all presales activities, and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel. Customers included are enterprises and service providers.

Market Responsiveness and Track Record: The ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the provider's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification of the product/brand and organization in the minds of buyers. This mind share can be driven by a combination of publicity, promotions, thought leadership, word-of-mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical or account support. This can also include ancillary tools, customer support programs (and the quality thereof), the availability of user groups and SLAs.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, such as skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis (see Table 1).

Source: Gartner (June 2012)

Completeness of Vision

We evaluated technology providers on their ability to convincingly articulate logical statements about current and future market direction, innovation, customer needs and competitive forces, and how well they map to the Gartner position. Ultimately, technology providers are rated on their understanding of how market forces can be exploited to create opportunities for providers.

In the server virtualization market, vendor understanding and articulation of the strategic path for virtualization (expanding into the foundation for the future infrastructure architecture and operations, and extending toward cloud computing) is particularly important and differentiating.

Market Understanding: The ability of the technology provider to understand buyers' needs, and to translate those needs into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those wants with their added vision. The market includes enterprises with their own strategies to build private cloud solutions, and cloud computing providers.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: A strategy for selling products that use the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extends the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: A technology provider's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set, as they map to current and future requirements. Interoperability between enterprises and service providers (and between providers) is also growing in importance.

Business Model: The soundness and logic of a technology provider's underlying strategic business proposition.

Vertical/Industry Strategy: The technology provider's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals (enterprises and service providers).

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, or defensive or pre-emptive purposes.

Geographic Strategy: The technology provider's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the native geography, either directly or through partners, channels and subsidiaries, as appropriate for the geography and market (see Table 2).

Source: Gartner (June 2012)

Quadrant Descriptions

Leaders

Citrix, Microsoft and VMware remain in the Leaders quadrant in 2012. Microsoft has been improving its overall road map and clarifying its strategy, but still struggling to deal with an entrenched VMware — especially in large enterprises. The functionality gap between VMware and Microsoft for basic x86 server virtualization infrastructure has gradually narrowed, while the pricing gap hasn't narrowed. Citrix remains a major player, but at this point due entirely to its strength in hosting desktop virtualization workloads, not in the general server virtualization market.

Challengers

Oracle has entered the Challengers quadrant in 2012, as it is improving its product capabilities, gaining more traction in Oracle-based accounts and focusing its strategy.

Visionaries

In this maturing market, there are no vendors in the Visionaries quadrant.

Niche Players

Parallels and Red Hat remain Niche Players in this market. Parallels continues to be a strong choice for service providers focused on high-density deployments of specific applications, and it will likely leverage that strength to expand its offerings over time. In the past year, Parallels has improved its focus on its core service provider market. Red Hat remains a general contender in the x86 server virtualization infrastructure market, with a significant amount of Linux in the market that has yet to be virtualized.

As of mid-2012, more than 50% of x86 architecture workloads have been virtualized on servers, and the market is in the middle of its fastest expansion to date. While saturation will begin to have an effect and slow the market in the next few years, there continue to be growth opportunities in midmarket enterprises, the Linux-based market (which is less virtualized than Windows) and expansion into more mission-critical workloads. Many large enterprises are in the early stages of private cloud computing, which is causing them to evaluate their virtualization foundation, consider multiple services based on different technologies, and analyze the possibility of managing multiple hypervisors. Pricing remains a concern, with huge disparities across the offerings, and licensing and entitlements continuing to change. Service providers are also adding more support for interoperability with virtualized enterprises, enabling easier migration and even hybrid cloud computing. All these trends are affecting the x86 server virtualization infrastructure market.

The x86 server virtualization infrastructure market is the foundation for two extremely important market trends that relate and overlap: infrastructure modernization and cloud computing. For infrastructure modernization, virtualization is being used to improve resource utilization, improve the speed of resource delivery and encapsulate workload images in a way that enables automation. Virtualization is a horizontal trend in this sense, with the vast majority of enterprises and workloads eventually becoming virtualized. Cloud computing is a more specific style of computing that will be applicable to specific workloads. Virtualization is a fundamental enabler to IaaS, and will be used to establish private cloud services, public cloud services and interoperable hybrid cloud services. Effectively, all IaaS offerings will rely on VMs or container technology. In the last year, the installed base of server virtual containers and VMs continued to growth significantly, due to:

• Growth in workloads, including more core workloads
• Continued rapid growth in customer adoption and penetration
• Increased use of HVDs (on servers) — HVD VMs accounted for nearly 40% of server VMs in 2011
• Increased use of cloud IaaS
• Continued growth in midmarket enterprises
• Maturity of competitive product offerings

Interoperability among service providers and enterprises is growing in importance, as enterprises plan to build architectures that can enable workload migration to and from cloud providers, and hybrid cloud computing.

An x86 server virtualization infrastructure provides the foundation for new management and automation tools, new security architectures and new process methodologies. Although the technologies in the x86 server virtualization infrastructure market are simply enablers, they are being used by vendors to drive customers to higher-level management and automation technologies. Choices made at the lower layers matter. While alternatives are beginning to emerge to enable heterogeneous virtualization infrastructures, they are still immature and limited in functionality.

The market is becoming more competitive in terms of product offerings and of overarching visions for the road map to cloud computing. VMware remains the market share and technology leader, but the market continues to grow, and competitors have a growing share of the market. While the majority of Global 1000 enterprises are heavily virtualized, a growing percentage have multiple virtualization technologies in place. Many smaller enterprises and those in emerging economies are still early in their virtualization effort. These enterprises have several viable alternatives from which to choose. In addition, as the cloud computing paradigm continues to evolve, cloud service providers offering IaaS want to make interoperability with their service offerings easy. A key trend among service providers is a shift to support better interoperability with existing enterprise virtualization infrastructures — in many cases, expanding their support for the same technologies that enterprises are using.