Magic Quadrant for x86 Server Virtualization Infrastructure

27 June 2013 ID:G00251472
Analyst(s): Thomas J. Bittman, George J. Weiss, Mark A. Margevicius, Philip Dawson

VIEW SUMMARY

Roughly two-thirds of x86 server workloads are virtualized, the market is mature and competitive, and enterprises have viable choices. More than ever before, enterprises are evaluating the cost-benefits of switching technologies and considering deployment of multiple virtualization infrastructures.

Market Definition/Description

The x86 server virtualization infrastructure market is defined by organizations that are looking for solutions to virtualize applications from their x86 server hardware or OSs, reducing underutilized server hardware and associated hardware costs, and increasing flexibility in delivering the server capacity that applications need. The x86 server virtualization infrastructure market includes all x86-based workloads (that is, application, Web and database servers; hosted virtual desktops [HVDs]; and 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" or "zones")
  • 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, and so forth.

Magic Quadrant

Figure 1. Magic Quadrant for x86 Server Virtualization Infrastructure
Figure 1.Magic Quadrant for x86 Server Virtualization Infrastructure

Source: Gartner (June 2013)

Vendor Strengths and Cautions

Citrix

Despite having a reliable product in XenServer, Citrix has not kept pace with the other vendors with server virtualization over the past year, in either functionality or market share. Citrix's strategy in the enterprise has been tied to desktop virtualization (through XenDesktop and XenApp), with significantly less interest from customers looking to virtualize nondesktop workloads. This heavy reliance on desktop virtualization has slowed XenServer adoption, as we have seen the level of interest in desktop virtualization level off from the growth that occurred in prior years, making HVDs a smaller percentage of overall x86 workloads. Further, customers still report some confusion regarding choice of hypervisors for desktop virtualization, and many clients are considering Microsoft's Hyper-V or remaining with VMware in lieu of XenServer.

On nonvirtual desktop projects, Gartner client inquiries indicate that demand for XenServer for server workload virtualization has declined, especially in enterprises (although service provider growth is offsetting some of that decline). Some service providers are converting from open-source Xen to XenServer, while others are deploying CloudPlatform 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 to Citrix as enterprise-derived desktop virtualization projects (especially in the near term).

Earlier in 2013, Citrix announced that the Xen Project is becoming a Linux Foundation Collaborative Project, which opens up Xen to the large Linux and open-source ecosystem of vendors and contributors. We believe that the broader exposure of Xen can help accelerate the adoption of Xen-based technologies (including XenServer) in cloud environments.

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 and XenDesktop as the products holding most of the mind share. Although Citrix has been successful selling both, the company recognizes that the market opportunity for mobile and bring your own device (BYOD) is much more attractive, whereby XenMobile and CloudGateway are better-positioned. As such, XenApp, XenDesktop and XenServer have more competition for customer mind share.

While VMware vSphere continues to be a broadly used hypervisor in XenDesktop deployments, 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 an intriguing relationship that can confuse some customers. 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 and 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.

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. Citrix is committed to continuing to deliver innovations in the XenServer product for cloud and desktop and has been actively revamping its product strategy to align closely with the recently announced open-source Xen strategy. During the past year, Citrix has shifted its communications and marketing efforts away from XenServer and instead has focused more on mobility, the cloud and desktop delivery.

Strengths
  • Rich product capabilities for low cost
  • Large opportunity in the cloud services provider market that relies heavily on open-source Xen today
  • Bundling of XenServer with other Citrix products across the mobile, network and desktop markets
  • Very large and loyal channel
Cautions
  • XenServer marketing execution and reach
  • Open-source software (OSS)-based competition
  • Continued market and strategy complexity in its partnership/competition with Microsoft
  • Limited R&D execution relative to competition specific to server virtualization

Microsoft

Microsoft has been in the market with Hyper-V and System Center Virtual Machine Manager (VMM) for five years. Windows Server 2008 with Hyper-V was delivered in 2008, with incremental enhancements delivered in late 2009 and early 2011. Windows Server 2012 was delivered in September 2012 and is a major virtualization release. Enhancements include significant scalability improvements (matching or passing those of vSphere for the first time), Hyper-V Replica for effective disaster recovery, the Hyper-V Extensible Virtual Switch and Network Virtualization, a more flexible live migration and storage live migration, Hyper-V clustering and clustered live migration, and improved Dynamic Memory. System Center VMM 2012 was delivered in April 2012.

While it has taken Microsoft five years, it has effectively closed most of the functionality gap with VMware in terms of x86 server virtualization infrastructure. Management and automation gaps on top of the virtualized infrastructure remain — notably, VMware's Site Recovery Manager (SRM) is more automated and better-suited for large-scale disaster recovery requirements. However, System Center VMM 2012 has also dramatically improved the ability to create private cloud solutions based on Hyper-V. Microsoft has also made fundamental strategy changes with respect to cloud interoperability and service provider enablement, adding support for standard Hyper-V VMs in its Windows Azure service, and potentially enabling service providers to build cloud infrastructures based on Hyper-V and System Center VMM 2012, although Microsoft is well behind VMware in establishing a service provider ecosystem.

While the management functionality is strong, lack of centralized management remains an issue. Management tasks need to take place through VMM, Hyper-V Manager and PowerShell. Some tasks can be done only through PowerShell.

Microsoft can now meet the needs of most enterprises with respect to server virtualization. Its challenge is not feature or functions, but competing in a market with an entrenched competitor, VMware. Microsoft is now winning a good percentage of enterprises that are not heavily virtualized yet — especially those that are mostly Windows-based (Linux is also supported, but some functions, such as backup, are handled much better for Windows guests). However, few enterprises that are heavily virtualized with an alternative technology are choosing to go through the effort to switch. A growing number of large enterprises are finding niches in which to place Microsoft — for example, in stores, branch offices or separate data centers. This strategy of "second sourcing" will enable these enterprises to evaluate Hyper-V for further deployments and perhaps leverage the competition in deals with VMware. While Microsoft's technology is capable, winning the larger and more mission-critical deployments will be an uphill battle and will require more proof points.

Rather than product, Microsoft's challenge is much more about sales and marketing, as well as overcoming an entrenched competitor with high-quality products and happy customers. The most important factor in Microsoft's favor is price. Unlike VMware, Microsoft does not rely uniquely on a business model based on virtualization software. At the same time, the market — including service providers — is becoming more concerned about vendor lock-in. In a market moving to cloud infrastructures based on virtualization software, and growing interest in potentially heterogeneous and open-source solutions such as OpenStack, Microsoft needs to be careful to not position itself as just another proprietary solution and find ways to differentiate itself from VMware based on its service provider and Azure offerings. Since the majority of OSs being virtualized are Windows-based, Microsoft should also be able to find advantages there from a management and application perspective.

Strengths
  • Administrative environment that is familiar to Windows administrators
  • Installed base of Windows, especially a large number of Windows-only enterprises
  • 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
  • Lack of centralized management
  • Growing competition with open-source-based solutions, especially in the service provider market

Oracle

Oracle has an application-driven virtualization strategy that goes beyond the hypervisor to provide full integration with the Oracle portfolio. Being a broad vendor of enterprise applications and infrastructure software, Oracle is positioned to test and tune the hypervisor. Oracle develops new Oracle VM enhancements that simplify management of its applications across multiple environments (virtual, cloud and physical). The Oracle virtualization product portfolio is focused on achieving faster application time to market, business efficiency and agility with better service levels.

Oracle VM is Oracle's implementation of the Xen hypervisor that also leverages intellectual property that ties to Oracle Linux and that was also acquired from Sun Microsystems and Virtual Iron. Oracle has further integrated these technologies into a more coherent and packaged solution with the Oracle VM 3.2 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 Zones (Oracle has changed the Solaris Containers product name to Oracle Solaris Zones); Oracle Linux Containers; 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 DBMS (including Oracle RAC), Oracle WebLogic Server and other Oracle 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 customer references whom Gartner talked to stated that certification and licensing were their primary reasons for choosing Oracle VM.

Oracle still 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 mature solution for Oracle-centric Red Stack architecture, and it is becoming a valuable component of an integrated Oracle-managed architecture and Oracle Engineered Systems as more management features are added. Gartner continues to receive a growing number of inquiries from clients considering VMware alternatives (such as Oracle VM) because of Oracle Certification, license and support issues. Clients continue to report that previous difficulties around live migration and storage recovery have generally been resolved — tied to improvements in both Oracle VM and Oracle Linux.

Oracle Solaris Zones offer shared OS virtualization capabilities for tactical x86 deployments (the same capabilities as provided on the SPARC platform, although that is out of scope for this market evaluation). All zones and container technologies 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 Zones alongside Oracle VM can be a complementary solution, targeted at different application requirements. There has also been a substantiated effort of open-source containers with joint efforts from Parallels, SUSE and Oracle to bolster container-based solutions and increase Linux densities and separation of workloads.

Strengths
  • Preferential licensing and certification of Oracle software using Oracle VM.
  • Oracle's overall software installed base and financial strength, allowing Oracle to test and tune the hypervisor for optimal application performance.
  • Strong solution in Oracle managed stack, including many ready-to-use VM templates for Oracle Linux, Oracle DBMS, Oracle RAC and Oracle Applications.
  • Oracle Solaris and OSS OpenVZ containers complement Oracle VM as a lightweight alternative to a hypervisor.
Cautions
  • Oracle tends to focus on an "Oracle only" virtualization market and user requirements.
  • Oracle's broad adoption is limited, although it is gaining share in Oracle accounts.
  • Market perception regarding Oracle VM often means customers dismiss Oracle prematurely.
  • Limited third-party ecosystem for Oracle VM (such as third-party backup and security solutions) limits Oracle VM's chances to become general-purpose.

Parallels

Parallels offers two virtualization products: Parallels Containers for Windows and Parallels Cloud Server, which includes Parallels Containers (formerly known as Parallels Virtuozzo Containers) for Linux as well as Parallels Hypervisor. Both products are targeted at service providers that serve small- or midsize-business customers, a loyal, viable and expanding community for Parallels. Additionally, Parallels is a major driving force behind OpenVZ, which is essentially the foundation of Parallels Containers and an important source of potential migrations to Parallels Containers.

The Parallels Containers product allows applications to run in lightweight, separate containers, offering processor affinity and memory protection and isolation. Compared with hypervisor-based solutions, Parallels Containers enables much higher server densities and can reduce OS software and administration costs. Parallels Containers 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. For those customers who prefer to manage their own OS, Parallels Cloud Server also includes Parallels Hypervisor, enabling service providers to offer traditional VMs on the same physical node as containers. Parallels Cloud Server combines Parallels Containers and Parallels Hypervisor with Parallels Cloud Storage to enable a complete high-availability solution on commodity hardware by creating a cloud storage pool from existing server hard drives.

As cloud computing evolves, Parallels is positioned well with service providers (and, through them, midmarket enterprise customers), but it has yet to become a factor with more than a few large enterprises. Parallels' service provider focus and lack of focus on on-premises enterprise virtualization may make growth into large enterprises more difficult. As the shift to cloud computing continues, Parallels is seeing interest and adoption beyond its traditional base of hosted service providers in using containers to support hosted applications, also tied to OpenVZ efforts and acceptance.

For now, Parallels offers the best solution for service providers building high-density and isolated solutions around common workloads, such as Web services. 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 Containers (and other Parallels cloud services delivery software). Parallels' success with containers and common management and automation tools creates an opportunity for further expansion with Parallels Cloud Server into the service provider market. Parallels has extended the capabilities of its virtualization solutions with automation and management tools in offerings such as Parallels Automation for Cloud Infrastructure, with associated storage virtualization.

Strengths
  • Parallels offers a unique and innovative container-based solution, including live migration and some isolation.
  • Parallels Containers is the leading product with a container-based solution for service providers.
  • Parallels offers reduced administrative and OS software costs, as well as higher density compared with hypervisor-based solutions.
  • The strong mix of containers, a hypervisor, storage virtualization and cloud management leads providers to a low-cost, high-performance alternative.
Cautions
  • Importance of an enterprise customer base (and onramp) as hybrid cloud computing evolves
  • Being able to monetize open-source OpenVZ container growth
  • Dependence by many workloads on a single host OS
  • Lack of a third-party management ecosystem, which will continue to limit Parallels' applicability in the enterprise

Red Hat

Red Hat has made some progress in this Magic Quadrant but still only incrementally, as in the 2012 Magic Quadrant. Its position has moved slightly to the right to reflect a broader vision from which to compete more effectively, but this vision is still at a relatively early stage. Red Hat continues to deliver improved functionality in its latest RHEV-M 3.1 release (such as live storage migration). But knowing that it will not displace VMware in many of its RHEL accounts, Red Hat has been formulating a multipronged strategy, based on: (1) delivering RHEV as good-enough feature/function virtualization, with strong performance and scaling; (2) integrating RHEV virtualization tools at higher levels within hybrid clouds; (3) creating a broad ecosystem of OEM and independent software vendor (ISV) partnerships with platform support and plug-in capability (such as high availability and disaster recovery, replication, snapshots, and storage); (4) creating cross-hypervisor management infrastructure and tools via its acquisition of ManageIQ (now CloudForms 2.0); and (5) building a self-service cloud stack on RHEV and CloudForms. Assuming good execution on these five initiatives, Red Hat stands to gain broader marketing opportunities to avoid being submerged under vSphere or Hyper-V, or appearing to create additional silos around multihypervisor management tools.

Thus, an expanded Red Hat vision would help broaden its go-to-market strategy. It should offer basic Kernel-based Virtual Machine (KVM) guest deployment without inclusion of RHEV tools; build out existing RHEL infrastructures with RHEV tools coexisting with VMware as a heterogeneous hypervisor strategy; take an active role in existing VMware virtualization infrastructures that have also deployed ManageIQ (now CloudForms) tools for a greater toehold and future migration opportunity; or coax VMware accounts to consider RHEV plus CloudForms as an alternative to VMware's vCloud as a less expensive OSS alternative. Red Hat has declared that CloudForms 2.0 will be offered as an open-source suite under a subscription service. RHEV works together with CloudForms to deliver self-service check-out from a service catalog, performance monitoring, chargeback, policy governance and other cloud-related features. These capabilities might have taxed Red Hat's internal development resources and further slowed progress of a hybrid cloud solution. With its other significant acquisition (of Gluster), Red Hat's vision has expanded to storage management, which it intends to offer integrated with RHEV through a common management interface.

Currently, RHEV still has a minor installed base presence in major RHEL accounts. The interest level as measured by Gartner inquiries remains relatively low when compared with vSphere or Hyper-V. Users are seeking greater reassurance that Red Hat can execute a broad vision and ecosystem, from virtualization to cloud management. Most Gartner clients run large VMware virtualized infrastructures and are focused on maximizing resource availability of Windows and considering selection of RHEL or other Linux guests. Red Hat has generally not been able to dislodge VMware in its RHEL accounts, and it has not succeeded in driving the Linux managed infrastructure toward greater budgetary allowance and virtualization independence. We would attribute these issues as execution problems stemming from an incoherent vision and lack of demonstrable product maturity. Those Red Hat virtualization accounts we do encounter tend to be strategically disposed to OSS and Red Hat, willing to pace and time their deployments to Red Hat's own road map and product maturity.

There have been other OSS Linux alternatives, such as Oracle VM (based on Xen), Citrix (XenServer), Parallels (Parallels Containers), SUSE (Xen and KVM) and Joyent (SmartOS). Meanwhile, competition in the cloud management space is intensifying from subscription-free OSS alternatives (such as CentOS, Ubuntu and Xen) and from hosting service providers (such as Parallels). As a result, we believe that better execution by Red Hat will be required for further progress on the Magic Quadrant. Through its RHEL base alone, Red Hat should aspire to be in the Challengers quadrant. But to get there, it will need to execute better on RHEV 3.1 adoption, storage management (convergence from Gluster), growth of ManageIQ (integration in CloudForms) and its overall messaging (including OpenStack, hybrid cloud, federation, platform as a service, DBMS/middleware, and third-party infrastructure and operations products) to affirm its position as an established general-purpose virtualization platform.

We recommend users pursue a cautious strategy based on proofs of concepts in Red Hat virtualization, with broader investment in build-outs as a potential longer-term strategy (three to five years). Those IT leaders most comfortable with Red Hat virtualization will likely have strongly independent and strategic Linux-based IT infrastructures and come from academic and government institutions or technical computing centers, which have not yet invested in the complete management toolchain and envision a common virtual management stack across hypervisors.

Strengths
  • Strong and loyal RHEL customer base opportunity (mostly nonvirtualized)
  • Integrated Linux kernel hypervisor (for example, leveraging mature OS scheduling capability)
  • Performance and OS security
  • Ease of access and installation
  • Leadership of the core KVM OSS development community
Cautions
  • Limited sales and marketing execution
  • Majority of virtualized RHEL instances running on VMware
  • Limited RHEV ecosystem of ISV tools and OEM support
  • Limited experiences in cloud management with underlying RHEV
  • Limited production use and experience with RHEV 3

VMware

VMware has maintained its functionality lead, introducing vSphere 5.1 in August 2012, including scalability improvements, vSphere Distributed Switch enhancements (including network virtualization and software-defined networking via the Nicira acquisition), support for single-root input/output virtualization (SR-IOV), vMotion without shared storage configurations, vSphere Data Protection, vSphere Replication and vSphere Storage DRS.

VMware continues to have dominant market share, and customers remain very satisfied with product capabilities and vendor support. However, concern over price and vendor lock-in is increasing. In August 2012, VMware eliminated the year-old vRAM pricing model, which had raised serious customer pricing concerns. VMware also acquired DynamicOps in July 2012, improving heterogeneous management and adding interoperability with Amazon. During the past year, an increasing number of Gartner clients have been asking about competitors to VMware, notably Microsoft, but also Oracle. On the other hand, very few large enterprises are switching, but some smaller enterprises that are not far along in their virtualization deployment are switching, and some larger customers are deploying alternatives to VMware in separate data centers or in branch/store locations.

VMware is still enjoying good growth, but it has slowed in the last year — at least partly due to increasing market saturation and competitive pricing pressure.

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). However, its push into infrastructure virtualization (storage and networking) is confronting established organizational structures and skills that are resistant to change — making growth harder. Service providers are very interested in creating easy onramps for VMware-based customers, but competitive technologies for interoperability (notably OpenStack), along with the concern of commoditization and vendor lock-in, are keeping service providers from expanding their VMware footprints rapidly. Still, VMware has a very strong service provider ecosystem.

On the desktop, VMware continues to expand and deliver on its View and ThinApp offerings. The integration of View and ThinApp has provided customers with 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. VMware continues to evolve its desktop offering beyond View and ThinApp, recently introducing Horizon Workspace for its mobile and BYOD offering. The success of View and Horizon Workspace is extremely relevant to VMware, as these implementations create vSphere stickiness and create difficulty in switching hypervisors.

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 about half of midmarket companies, those with 100 to 1,000 employees, tend to use VMware.) However, as Microsoft gains marketing momentum, VMware will need to continue to offer low-priced packages (such as vSphere Essentials Plus) to remain competitive in this market. As VMware tries to push virtualization to 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 60% to 70% virtualized, while Linux is 35% to 45% virtualized.) Oracle, Red Hat and open source could make VMware's expansion difficult.

VMware's primary market issues are price, concern with lock-in 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. In terms of heterogeneity, while few customers are heterogeneously managing VMs today (and the operational cost and complexity should deter most users), the interest is there, and users are asking about cloud infrastructure solutions such as OpenStack that could open the door to alternative virtualization architectures.

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 service provider ecosystem
Cautions
  • Business model that 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 two-thirds penetrated

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

No vendors have been added.

Dropped

No vendors have been dropped.

Inclusion and Exclusion Criteria

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 (such as live migration)
  • They must have at least 100 organizations using their generally available products as of 15 March 2013.

Open-Source Communities (Such as Xen and KVM Hypervisors) Versus Vendor-Embedded OSS 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 Xen or KVM. The omission of Xen and KVM as OSS projects follows the same decision used in previous Magic Quadrants (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), Red Hat (KVM) and Parallels (OpenVZ). Another such example is Joyent (see below), which was not included in this year's Magic Quadrant positioning due to a limited worldwide presence, but whose container (zone) strategy relies on the open-source project SmartOS.

External service providers, 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 services providers (such as Amazon and Google) 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.

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 it will add to internal support costs if skills are minimal or infrastructures are poorly implemented, resulting in more-frequent outages and downtime.

There were two additional vendors we considered including in this Magic Quadrant but decided not to at this time: Joyent and Huawei. Both have promising technologies but have been limited in deployments and references.

Joyent

Joyent's SmartOS leverages the illumos project, the open-source fork of Solaris. Launched in 2010, the project has gained financial and technical support from several companies, which rely on the illumos kernel as the technology foundation for their own products, as well as backing from a developer community. For virtualization, Joyent uses OS containers, or zones, and in late 2011, it introduced KVM support within zones. Using zones, Joyent customers achieve very high levels of density and near bare-metal performance. KVM within zones adds additional security, resource control and management within the virtualization layer. However, two layers of abstraction may add application support challenges. SmartOS embraces the innovations developed by Sun Microsystems for the Solaris environment, such as DTrace to track latency in real time and patch live systems and ZFS as a scalable and secure file system. Joyent will target its future revenue from public cloud services and from its SmartDataCenter software, comprising a file system, analytics and resource management capabilities to enable IT shops to launch private or hybrid clouds.

Huawei

For the x86 server virtualization market, Huawei primarily focus on Brazil, Russia, India and China and other emerging markets. The FusionCloud suite of products encompasses management, third-party hypervisors and a FusionSphere Xen-based hypervisor, as well as extended input/output, availability and recovery products and capabilities. Huawei claims hundreds of references for FusionCloud. While we recognize Huawei's presence with FusionCloud, at this point it is unclear how many of Huawei's FusionSphere customers are using Huawei's own hypervisor versus third-party hypervisors.

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.

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria

Weighting

Product/Service

High

Overall Viability (Business Unit, Financial, Strategy, Organization)

High

Sales Execution/Pricing

High

Market Responsiveness and Track Record

Low

Marketing Execution

High

Customer Experience

Standard

Operations

Low

Source: Gartner (June 2013)

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 they 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 uses the appropriate network of direct and indirect sales, marketing, service, and communications 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.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

High

Marketing Strategy

High

Sales Strategy

Standard

Offering (Product) Strategy

Standard

Business Model

Standard

Vertical/Industry Strategy

Standard

Innovation

Standard

Geographic Strategy

Low

Source: Gartner (June 2013)

Quadrant Descriptions

Leaders

Leaders in this market have a clear strategy and road map for their offerings, understand virtualization's role in infrastructure and operations transformation, and have a clear vision with respect to cloud computing. Most importantly, they have a strategy to communicate this to their market and are executing well from a sales and market share perspective. Microsoft and VMware remain in the Leaders quadrant in 2013. Microsoft delivered a major release — the first since late 2009 — which has improved its product offering significantly. VMware remains the overall leader, with a dominant market share, but the gap is decreasing as competitive offerings mature.

Challengers

Challengers in this market have a strong ability to execute but a more focused marketing or product vision. Oracle entered the Challengers quadrant in 2012, and it continues to improve its product capabilities and market acceptance, gaining in 2013.

Visionaries

Visionaries in the x86 server virtualization infrastructure market have a differentiated approach or product, but they aren't meeting their potential from an execution standpoint. Citrix has shifted from the Leaders quadrant to Visionaries — based on a solid product that is being positioned more as a foundation for other products (notably, CloudPlatform and XenDesktop) than as a stand-alone offering.

Niche Players

Server virtualization is a broad market, and Niche Players in this market have either not capitalized on their opportunity yet or are focused on specific niches where they can be successful versus competitors that have a more general approach. Parallels and Red Hat remain Niche Players in this market. Parallels continues to be a strong and improving choice for service providers focused on high-density deployments of specific applications, and it has reasonable plans to expand its base over time. 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.

Context

As of mid-2013, almost two-thirds of x86 architecture workloads have been virtualized on servers. Saturation is beginning to have an effect and slowing the market somewhat. For the next few years, there will continue to be growth opportunities in midmarket enterprises, the Linux-based market (which is less virtualized than the Windows-based market) and cloud providers, as well as expansion into more mission-critical workloads. Most 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 cost versus the benefits of managing multiple hypervisors. Pricing remains a concern, with huge disparities across the offerings, and licensing and entitlements continue to change. Service providers are also adding more support for interoperability with virtualized enterprises, enabling easier VM migration and the potential for hybrid cloud computing. All these trends are affecting the x86 server virtualization infrastructure market.

Market Overview

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, reduce costs, improve energy efficiency, 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 infrastructure as a service (IaaS), and it 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 grow significantly; however, the market is beginning to see a slowdown in growth due to increasing market saturation. Virtualization enables faster provisioning and deprovisioning, increasing the growth of workload deployments and offsetting saturation somewhat. At the same time, the flexibility and low barrier to entry that virtualization and IaaS create is decreasing the average life span of workloads.

Almost half of all server VMs are now HVD VMs (although they tend to be consolidated at a much higher density, resulting in fewer server licenses). Roughly 4% of all server VMs are running in cloud providers. Most organizations are focusing virtualization efforts on the more complex, Tier 1 workloads. Based on polls, nearly half of large enterprises have already deployed a private cloud service at least as a pilot project, and about half are building strategies for hybrid cloud interoperability. In 2013, more enterprises than ever before are evaluating alternative choices for x86 server virtualization infrastructure, as the market becomes more competitive. Choices made at the server virtualization layer matter to future plans for cloud infrastructures and hybrid cloud interoperability.

VMware remains the market share leader, but the market continues to grow, and competitors have a growing share of the market. The majority of Global 1000 enterprises are heavily virtualized, and very few are considering changing their existing virtualization technologies. However, a growing percentage of them have or are planning to have multiple virtualization technology silos, each managed with its own administrative solutions and skills (which may reduce software expense, but which also increases overall operational cost and complexity). 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 services 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 VM technologies that enterprises are using. However, open-source-based frameworks, such as OpenStack, promise heterogeneous hypervisor interoperability — a promise that is long from mature at this point.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

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

Sales Execution/Pricing: The vendor'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.

Market Responsiveness and Track Record: 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 vendor'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 with the product/brand and organization in the minds of buyers. This mind share can be driven by a combination of publicity, promotional initiatives, 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 support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, SLAs and so on.

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

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and they can shape or enhance those with their added vision.

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: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communications affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

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

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.