Few Independent Virtualization Companies Survive

By Chris Preimesberger  |  Posted 2009-05-13 Print this article Print

With Virtual Iron leaving the ranks of providers of independent virtualization options, only a small number of them remain in the market, including Parallels, Debian's OpenVZ and Ubuntu Linux.

"Market consolidation seems to be upon us," Galen Schreck, an analyst with Forrester Research, told eWEEK. "Plus, Citrix's move to give away a full-featured version of XenServer makes it pretty hard to charge for this kind of functionality.

"What's a company like Virtual Iron to do? Both are Xen-based, and have pretty similar capabilities. Sure, Citrix charges extra for its most advanced management, but you get a lot of functionality for no money whatsoever. Meanwhile, VMware is the clear market leader with Microsoft being the next most popular platform in a distant second place."

Virtual Iron aimed its wares mostly at the small and midsize business markets. Is Oracle making a play for the smaller markets with this acquisition?

"I don't think this acquisition is about smaller markets-it's more of an upgrade to the management capabilities of Oracle's own Xen-based hypervisor," Schreck said. "They get a better UI [user interface] as well as dynamic workload management and power management."

Schreck said it is still unclear how Oracle will handle the integration of both Sun and Virtual Iron into its catalog.

"There is definitely some overlap here," Schreck said. "Neither product has a lot of customers, so it's not a question of which has more market traction. Sun's xVM Ops Center is a nice product, but Virtual Iron is more Windows-friendly-which gives Oracle immediate access to the largest virtualization market."

'Interesting dynamic' with VMware

The Virtual Iron acquisition creates an interesting competitive dynamic with VMware, Zeus Kerravala of The Yankee Group told eWEEK.

"They're not the best of partners, but they do some work together," Kerravala said. "As for Sun, it [Virtual Iron] is a parallel offering. Oracle didn't have any way to virtualize Windows or Linux environments."

Katherine Egbert, an analyst with Jefferies & Co., said she believes the acquisition is a clear sign that Oracle wants to move deeper into the midmarket, a place it has hardly penetrated in the past.

"It is a midmarket play. Virtual Iron has lot of government and education [customers] in their installed base," Egbert said. "Oracle gets the full stack now, everything from the bare-metal hypervisor up to the highest-level user application."

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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