VMware Not Resting on Laurels, President Says

CAMBRIDGE, Mass.—More players may be coming into the increasingly competitive virtualization space, but VMware is not ready to relinquish its leadership role, according to the companys top executive.

At the companys analyst meeting here June 5, President Diane Greene said that while competitors like Microsoft and the developers of the open-source Xen hypervisor may aggressively be developing virtualization products, VMware—with its new Virtual Infrastructure 3 suite unveiled at the meeting—is still steps ahead.

"VI 3 ... goes way beyond the hypervisor," Greene said in a presentation to almost 100 analysts and reporters.

Referring to Microsofts announcement May 23 that it will have a beta version of its "Viridian" hypervisor by the end of 2006, and a final version within six months of its Longhorn release, Greene said that the Redmond, Wash., software giant "within two years will be shipping a hypervisor. With VI 3, weve had 6,000 customers in beta for the past nine months, and it will ship in two weeks," she said.

She said VMware technology has already become the "de facto standard" for x86 virtualization, and noted that the company has already opened up its interfaces and file functions to enable more tie-ins for third-party suppliers.

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Analysts at the meeting credited VMware with growing its capabilities despite having a significant head start in the space.

"They have a leadership position, and it would be very easy for them to just sit back and milk the cash cow," said Gordon Haff, an analyst with Illuminata, in Nashua, N.H.

"Instead, they really are taking their leadership position and leveraging it to stay out in front."

That includes not only advancing the capabilities of their products, but also adjusting their pricing to the current market, which includes the free Xen hypervisor, Haff said.

"Theyre recognizing problems and doing a good job dealing with them," he said.

Virtual Infrastructure 3 is a combination of enhanced products, such as ESX Server, VirtualCenter management tools and VMotion, and new capabilities, including Distributed Resource Scheduler, High Availability and Consolidated Backup products.

The goal is to allow customers to create a virtualized pool of data center resources—not only servers, but also storage and networking—that can be dynamically and automatically managed depending on workload and business needs, according to officials with VMware, of Palo Alto, Calif.

Users can set service level needs for applications, and let the software decide where to find and assign the capacity.

If a physical machine fails, the high-availability features will automatically migrate the virtual machines to other hosts. If more capacity is needed for an application, the software will automatically allocate it.

Much of the work currently done manually is now automated, Greene said.

"Were taking all the systems that get cabled together in the data center … and were hiding that from the people deploying the applications," she said.

In addition, Virtual Infrastructure 3 is more scalable, being able to run applications that require up to four processors and 16GB of memory, configurations to run the most demanding mission-critical applications. VMware technology also now fully supports Solaris and the open-source Ubuntu operating systems.

"Virtualization is no longer a one-time [return on investment] or cost-containment project," Greene said.

VMware estimates that about 90 percent of customers are using virtualization in production environments, and analyst firm IDC of Framingham, Mass., predicts a $15 billion virtualization market by 2009.

Jeff Hunter, systems engineer with Nationwide Insurance, said VMware technology has enabled the Columbus, Ohio, company to see a 12-to-1 server consolidation ratio in its multiple data centers, and in the first half of 2005, the technology saved Nationwide $488,000 in hardware costs.

In addition, the company estimated another $302,000 savings in operation costs, including such aspects as power, cooling and data center space, Hunter said.

Hunter, who has been beta testing Virtual Infrastructure 3 since February, said the new product is a significant step forward in VMwares offerings, particularly on the management side.

"If we have X number of virtual machines on a host, and the host machine goes down ... there isnt really any interruption," Hunter said. "Because of [VMware] High Availability, [the virtual machines] will automatically come up on another host."

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