IDC: $11B Virtualization Services Market by 2011

Theres money to be made in virtualization services, according to IDC.

In a report released July 11, the research firm found that the market for virtualization services will grow from $5.5 billion in 2006 to $11.7 billion in 2011, as businesses turn to the technology to address a range of issues in the data center from power consumption to consolidation to cooling costs.

Part of the growth is being driven by virtualization products that now allow the technology to run on volume x86 servers, which typically cost less than $25,000, according to IDC. Most of the services growth will happen in this section of the market.

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For years, most virtualization services revolved around implementing the technology within high-end systems in the data center, as well as support, training and education. In the next five years, however, businesses will be looking for more consulting services and systems integration as more x86 servers are equipped with virtualization software.

"Over the next several years, IT consulting and systems integration will begin to become the dominant opportunity as the technology becomes much more mainstream," analyst Matt Healey wrote in the report.

Click here to read the latest on the virtualization from Forrester Research.

For now, virtualization—the ability to run multiple operating systems on a single physical server or desktop—remains dominated by VMware. In addition to its current lead in the market, the Palo Alto, Calif., company is expected to expand its reach when its parent company—EMC—sells off 10 percent of VMware during an IPO scheduled for later this year.

Earlier this week, Intel announced that it will invest more than $200 million in VMware and own 2.5 percent of its common stock.

In a report released July 9, Forrester Research found that VMware will remain the dominant force in the market, although Microsoft and XenSource—the company founded by the group that started the Xen Project—will likely challenge VMwares dominance. However, that wont happen until 2010, the Forrester report said.

In addition to Microsoft and XenSource, the virtualization technology that Intel and Advanced Micro Devices are building into their microprocessor architectures will also increase the product competition in the x86 server market, according to Forrester.

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