We see the availability of Microsoft Hyper-V and System Center Virtual Machine Manager (SCVMM) as an important milestone in virtualization. But it really isn't going to shift the market any time soon.

Everyone has been waiting for Microsoft to come into the market in order to bring true competition to VMware. However, this is not going to happen for some time to come. How long? It may never happen. Don't get me wrong - Microsoft will challenge VMware on some level - but not in any real way for years - especially in large Enterprises. In that time VMware will continue to innovate, acquire new companies/products and increase their installed base.

There is speculation that Microsoft will dominate the SME virtualization market - the same that Virtual Iron is already selling successfully into. We know that Microsoft will do well in the SME but again it will be over time. There is a big market for Virtual Iron and that will be true for years to come. We've been shipping product since 2006 and have a proven track record and mature solution. Microsoft has a long way to go with their product. It isn't just an issue of features (which they lack) but of implementing a virtual center platform that can manage the virtual infrastructure reliably. That is an extremely important point. This is the challenge for them and Microsoft is just at the threshold of this journey.

Therefore the reality is that everything and nothing changes with the coming of Microsoft Hyper-V and SCVMM.

Nothing changes because Microsoft doesn't have a relevant product yet. Multiple industry analysts believe that Microsoft is 18 months with having a true server virtualization solution. In that time a lot will happen.

Everything changes because the Microsoft machine is rolling forward. And when a giant moves everyone pays attention.

As Microsoft educates the market with a rumored $300 Million in marketing funds dedicated to Hyper-V and SCVMM - and fail to deliver true server virtualization - Virtual Iron will leverage this opportunity to provide our proven solution. And while Microsoft stumbles through a 1.0 product and 2.0 and, and... Virtual Iron will continue to innovate and grow.

Simon Crosby - the Citrix CTO said in a Search Storage article - http://searchstorage.techtarget.com.au/contents/25176-Open-source-hypervisors-pose-challenge-to-VMware

"Another difference, according to Crosby, is that Virtual Iron's raw disk access method is block-based; XenServer can offer either 'file-backed' or 'block-backed' access. 'Because we own the hypervisor, we can do much more integration and development around it—Virtual Iron is just a consumer of it,' he said."

Wow. First - that is a false and ridiculous statement. We have been a substantial contributor to the Xen project and not just a consumer. Virtual Iron was the first Xen provider to ship 32 & 64-bit OS support, first Xen provider to ship LiveMigration, etc.

The market is in for a rude awakening with Citrix in regards to server virtualization. They don't have a viable server virtualization product. Instead they have cobbled together solutions from the ecosystem to make up for their deficiencies but it is impractical, expensive and adds complexity. They should stick to desktop - which is where they are strong.

Any discussions around file systems is just posturing on his part- of course we could integrate with a file system if it made sense to our market. I have spent years in the storage and file system arena and know that space extremely well and he is speaking out of school.

But that isn't even the biggest issue with Simon's statement. The Xen open source project is exactly that - an open source project. Citrix doesn't own the Xen hypervisor - the entire community does.

It is appalling that Simon would say what he did - it is irresponsible, false and antithetical to the whole open source philosophy.

Our VDI strategy is very simple. Today a number of our customers are using terminal services and RDP for application specific and for the full desktop experience. Remember, Virtual Iron is focused on the SME and in many cases this is more than sufficient for their needs. See Chris Barclay's blog on more details on this.

Virtual Iron also works with different VDI brokers including 2X and Provision Networks. And we will work with others as well. A virtualization expert blogger, Virtualization.Info, wondered why we decided to work with 2X and the answer is simple - server virtualization is part of a bigger ecosystem and it's important to work with partners.

What we've seen is the last four months is a visible growth in the interest and implementation of desktop virtualization with Virtual Iron server virtualization software. It is quickly becoming a common and frequent part of our universe.

We've been asked on more than one occassion if we are a VDI company. I'm not sure what that really means. So I am going to say the answer is no - we are a server virtualization company and our customers use our server virtualization solution to host virtual desktops. We enable customers to implement VDI and it is a use case for our server virtualization solution. Our customers use our server virtualization for file, web, email, database, etc - and desktop virtuallization.

We have a number of customers that are using Virtual Iron server virtualization as a part of their VDI implementation. As I stated above, through terminal services and RDP or by leveraging a connection broker ala 2X and Provision Networks. It is important to look through the SME lens and what you should see is that they need solutions that are easy and cost effective. And that is exactly what we do.

Charles Babcock, writer for Information Week, reporting from Citrix Synergy Event in Houston – wrote: “Citrix Systems is changing its emphasis on virtualization. From now on, it's less about launching virtual machines in the data center and more about delivering virtual services to user desktops.” Here is the link to the full article:

"Citrix Shifts Virtualization Spotlight To Desktops" - http://www.informationweek.com/news/software/server_virtualization/showArticle.jhtml?articleID=207801153&cid=RSSfeed_IWK_News

This is a very compelling statement that requires further analysis.

- Delivering services to user desktops leveraging virtualization has always been important to Citrix and one of the main reasons they acquired XenSource. So what is the "shift"?

- I think the sentence: "it's less about launching virtual machines in the data center..." provides the answer. The implications are pretty strong that the "shift" is server virtualization isn't a core focus for Citrix going foward. And you really can't be "less" about supporting server virtualization. It is either something you do or don't do.

- This shift isn't really a suprise to us and to some industry experts. Gartner's Tim Bittman said in March 2008: “Citrix acquired XenSource to expand into the Virtual Desktop Infrastructure market (where client VMs are hosted on servers) and to compete in the server virtualization market. The former seems like a rich opportunity for Citrix. The latter will be an uphill battle...”

- We don't really run into Citrix in competitive situations at end user customers or the channel. From our perspective they aren't in the server virtualization business where it counts -in the field.

- This is the smart move for Citrix. Being a major player in server virtualization was never in the cards for them. For one thing, Citrix is missing the equivalent of VMware Virtual Center and Virtual Iron’s Virtualization Manager – which is requisite for true server virtualization. Additionally, their whole business model is around desktop solutions and leveraging this is the right thing for them to do.

- Another factor that must be considered in the Citrix “shift” is Microsoft and the MS Hyper-V solution. Does Citrix really want to compete head-to-head with their biggest strategic partner?

Citrix probably won't agree and will deny that they are "shifting" away from server virtualization. But keep your eyes open. I predict that their actions going forward will fortify my analysis.

Virtual Iron has created a term we call True Server Virtualization that we've found to be extremely effective in educating people in the increasingly confusing virtualization arena.

WIth a number of hypervisors bouncing around from a wide range of vendors it is easy for people to get lost in the weeds as they research this stuff.

The hypervisor is important and is useful for consolidating servers. But true server virtualization isn't just about consolidation. Rather it is about managing server environments.

The power of Virtual Iron True Server Virtualization is it enables the management of your systems independent of the physical infrastructure. As a result new applications can be brought online in minutes. Moving applications to new physical servers can be done instantly without causing any disruption to your business. Virtual servers can easily be copied for rapid recovery – if ever required. Upgrades, bringing new applications online, performance management and business continuance are greatly simplified with True Server Virtualization.

Virtual Iron customers have seen significant acceleration and improvement in the day-to-day management of their server infrastructure. The analogy I like is using an elevator versus running upstairs to get to the 20th floor. True Server Virtualization is really that much of a "no-brainer".

With True Server Virtualization it is important not to just focus on the hypervisor but more importantly - the tools, controls, capabilities and management of the virtual servers. Additionally, actual end user deployments in both test/dev and production environments is critical to the value of the solution. Vendors can say they do "x,y and z" but how they do it and how widely it is implemented factors into whether it is real or just vaporware.

There is a big divide between compelling technologies glued together and fully realized products. Right now the majority of the server virtualization "solutions" out there are really just technologies bolted together and not "products". Virtual Iron has technology manifested in a real product. Lots of customer deployments. A suite of tools for control and management of the environment. That is True Server Virtualization.

VMware has made a big deal about their Memory Overcommit feature as a competitive advantage for scalability and total cost of ownership. They do what many vendors do - create Fear, Uncertainty and Doubt (FUD) in the market to beat their competition. And like many engineering-driven companies they do this by focusing on some esoteric technical capability that can't be proven one way or another to have any real or broad applicability.

VMware claims they need less memory on physical servers to run the same or more virtual servers than their competition - including Virtual Iron. And since they can use less memory - or so they claim - then the overall cost is less because people are spending less money on memory. For example, you can buy 2 GB versus 4 GB of RAM for your servers.

You have got to be kidding? The price difference between 2 GB and 4 GB is between $100 and $250. And that is what they are hanging their hat on?

First, the impact on TCO is absurd. It may be a good feature - I don't personally know - but saving $100-$250 does not make up for the big price tag on their software licenses and maintenance.

Second, there is no real way to prove that they can run more virtual servers than their competitors unless you put these solutions in the same exact production environments. And even then there are so many variables that finding relevancy is extremely difficult. Vendor benchmarks don't count because you can make these look anyway you want.

For SME companies - getting lost in the weeds around memory overcommit is ridiculous. And it is evidence that when vendors try to be all things to all people they are going to be disadvantaged regardless of how much revenue they have or how big they are. This topic is the wrong conversation to have and that goes double for the SME.

I think we should all take Thoreau's advice - Simplify, simplify, simplify. Provide great products, support and an overall experience between the customers, the partners and the vendors. Having a stupid technical argument about something that is moot, esoteric and fundamentally can't be proved is - well - stupid.

Let me ask you a question: For those of you interested in Microsoft Hyper-V, how many of you are willing to convert to Microsoft Windows Server 2008? If you want to use Hyper-V, that’s exactly what you’ll have to do. Call me crazy, but I don't think there is going to be a stampede of people rushing to do this right away—certainly not for production environments. And when they do upgrade, it won't be for 100% of their servers, but rather bit-by-bit. History has shown that end-users have been very reluctant to implement new Microsoft platforms in stage 1.0 unless forced to do so.

Even more importantly, Hyper-V doesn't have the mobility, high availability, recoverability and load balancing capabilities that actually make server virtualization valuable to customers. Yes, it will provide server consolidation, but that is the easier part of server virtualization and for most customers, not where the real value is. Customers want to be able to move virtual servers between different physical servers online and transparently. They want failover capability and rapid recoverability. Hyper-V doesn't provide any of these capabilities in its 1.0 version and it’s not clear when it really will.

Additionally, I find it a bit of leap to believe that the majority of customers with mixed Windows and Linux environments will use Hyper-V for Linux. Even though Linux is supported by Hyper-V, it’s just not a natural fit. Look, Microsoft NAS supports NFS and I can tell you that while it’s a good product, people are using it for CIFS and not NFS. Sure, there might be a maverick or two using Microsoft for NFS, but it is truly the exception. I believe that will play out for Hyper-V and Linux environments as well. It's like a conservative Republican voting for Obama or Hillary—it's simply not going to happen all that often.

It is important to put things into perspective: Hyper-V is a new Microsoft technology that requires its new server platform; it has limited functionality and lacks core capabilities that a large number of customers are specifically looking for with server virtualization; and while Windows is the dominant OS, there is a big (and growing) Linux ecosystem that often co-exists within the same data center—and most customers are not going to use Hyper-V for Linux environments. Certainly, a large number of people will use Hyper-V on some level just because it’s Microsoft. But it isn't going to become pervasive for some time to come. The BIGGEST issue we have is educating people so that the HYPE around Hyper-V doesn't slow us or end users down.

I've spoken with dozens of SME end users about power, cooling and floor space issues and it is a real problem. The cost of power varies significantly within the United States and is highest for regions along the densely populated East and West coasts, Alaska and Hawaii. Other parts of the world, including Europe and Asia, are experiencing even greater challenges with the high cost of energy, limited availability of power and floor space. I have spoken with IT managers that just don't have any more power. They literally have to turn something off in order to power something else on.

(This blog is also available as a podcast.)

HVAC systems draw even more electricity as they work harder to remove increased amounts of excess heat. If the power and cooling systems in the data center are near capacity, expensive upgrades may become unavoidable. This problem eclipses the cost of power - upgrading your HVAC system is disruptive and extremely expensive.

Server virtualization can be an effective remedy for power, cooling and floor space challenges. One of the core values of server virtualization is to reduce the number of physical servers in the data center. The math is easy - less physical infrastructure creates a domino effect of efficiency.

Virtual Iron's architecture provides even greater power and cooling efficiency since we don't need a local disk drive in the server. Instead Virtual Iron uses the physical server's memory. Disk drives are mechincal devices that spin and spin and spin. As such they consume lots of power and generate lots of heat. Therefore, Virtual Iron has an inherent advantage over VMware - since they do require local disk drives.

Power and cooling is not the only issue where disk drives are concerned. The cost of the disk drives must be factored in as well. The price of disk drives are getting pretty low on a per GB basis but the drives keep getting bigger - which means you pay more even if you don't need all that capacity. Additionally, managing local server disk drives add layers of inefficiency that flies in the face of a virtualized data center. Keep in mind that disk drives do three things - read, write and break.

When we bring up the disk drive issue to customers they get a moment of clarity and they agree that not having local drives is a real advantage. But it is something that is easy to overlook. Is it a make or break consideration? It depends. If you have a couple of physical servers - probably not, but it all adds up. If you have five, six, ten, twenty, one hundred physical servers - it is a pretty major issue - no matter how you spin it.

There is some confusion regarding the roles of the Xen project, XenSource and the growing number of Xen virtualization vendors in the market. This confusion slows us and our customers down - this blog will hopefully provide some clarity.

(This blog is also available as a podcast.)

The Xen project provides hypervisor source code to anyone that wants it. Virtual Iron, among many others, decided to take advantage of this and built a solution around the Xen open source.

It is important to note that I said Virtual Iron built a "solution" around the Xen open source hypervisor. Xen is a piece of technology—a component, if you will. While valuable, it is ultimately just a piece of an overall solution. We take the Xen code, build on it, scrub it, enhance it, make it bulletproof, and then we give back to the community. Additionally, we developed layers of control and management that are solely our own and unique to Virtual Iron—creating a complete solution. And it is the solution you build around Xen that is more important than any single component.

This last point is important. We've had customers that implemented other Xen variants and hated it—they initially judged us with a critical eye because they had been jaded by previous experiences. Just getting in the door was an uphill battle. After they evaluated our solution, they realized that Virtual Iron was not the same as the others. So don't get confused by all the different players leveraging Xen.

Where do all the other Xen players fit in? A number of these vendors are operating system guys—including Novell, Red Hat and Sun—which is interesting since Xen virtual infrastructure actually works beneath the operating system. Will Microsoft customers really want to embrace a virtualization solution from Linux and Unix OS guys? Conversely, will SME customers with mixed Linux and Microsoft environments want to use Microsoft virtualization? It isn't just an emotional issue, but rather one of culture, understanding the requirements, appreciating the nuances of the environments, etc.

Many Xen vendors face the same challenges. They are relatively new to the virtualization game AND it is not a core competency. The OS guys may disagree, saying that virtualization solutions are operating systems. This is not true. While there may be similarities between the two, they are not interchangeable.

For the most part these vendors are building solutions from the ground up. This is not a one or even a two year process. Yes, they have or will have basic hypervisor technology. However, that is just the tip of the iceberg. The challenge is to provide the mobility and management capabilities necessary to support a true server virtualization environment—and make sure their solutions are bulletproof. In the complex world of infrastructure within vast ecosystems, this is much easier said than done.

Citrix is one of the Xen providers that I didn't discuss. Unlike the others, Citrix is not an operating system vendor. In fact, Citrix bought XenSource, the company that created the open source Xen community. Of course, Citrix leverages the Xen open source hypervisor, but with no additional advantages. Citrix is treated the same as any other vendor in the Xen open source project.

How does Citrix fit into the virtualization landscape? The company has a lot on its plate and is running in a million different directions at once. Keep in mind that Citrix has the unenviable task of going head-to-head with VMware. There are high expectations and the industry is banking on Citrix being the contender that stands up to VMware. Good luck with that.

The market is all a buzz about the new Citrix pricing. On the face of it they reduced their pricing and people are asking how we intend to respond. First, we aren't even sure what the details are because they haven't been clearly articulated. But more importantly we NEVER see Citrix in our channel or with end user accounts. Right now it's just sound and fury signifying nothing.

Virtual Iron is in a different position from all of the above. Obviously - like everyone else - we have challenges in front of us. But there are also important things we need to bang the drum about more loudly and more often. These include the following: Server virtualization is our core competency. We are OS agnostic. We have all of the core control and management functionality for true server virtualization. We are field proven. We are focused on a specific market segment and as such, we are far more targeted. It is important to understand that Virtual Iron provides much more value above and beyond the open source Xen hypervisor. In fact, we transcend Xen. Pun intended.

Win, win, win. That is the mission in a market-driven society. No one really believes that it’s “not winning or losing, but how you play the game” that matters. Microsoft didn’t become the behemoth it is today by following the golden rule. That is certainly true of Oracle as well. They won because they were aggressive, opportunistic and didn’t play nice.

(This blog is also available as a podcast)

In this society, we value leadership—and even dominance. But we also reject monopolies because there is no competition—no checks and balances—which typically leads to inferior products at inflated prices. I don’t think anyone can argue that VMware is fundamentally a monopoly in the virtualization space. Some estimate that Microsoft has 20-25% market share, but does it really count if you give your product away for free? For all intents and purposes, VMware owns nearly 100% of the market—if you use revenue as your measure.

VMware will continue to become bigger and bigger. It will seek to deliver new capabilities and products. It will look for new market opportunities. VMware doesn’t have modest goals—it will be aggressive, opportunistic and won’t play nice to achieve greatness. In fact, VMware wants to eclipse Microsoft and all that it has achieved. And VMware is well-positioned to make this happen.

VMware sits beneath the operating system and as such, it trumps it and is now first in line. And since it sits beneath the operating system, it automatically achieves what Microsoft never can: heterogeneity. Operating systems by their very nature are homogeneous (it’s like saying sugar is sweet) and therefore, you will always have a dividing line between Windows and Linux. But VMware is OS independent. It has been embraced by both Windows and Linux constituents. Right out of the gate, VMware has a bigger potential market than Microsoft by virtue of its universality.

All of the ecosystem partners will continue to help further VMware’s success because it is a symbiotic relationship—right now, everyone is making money. But in so doing, there is a big risk that over time, VMware will marginalize most, if not all, of its ecosystem partners.

VMware is in a position to deliver more and more functionality that will increasingly impact the very ecosystem that is complicit in making it successful. Since VMware today is fundamentally an infrastructure company, it will build concentric circles of capability from that point outward. That is why its proprietary file system is so important—it enables VMware to manage and control data. It gives VMware the keys to the kingdom and they know it. Microsoft never quite got this and still doesn’t today. In the meantime, VMware is in a position to create more software that will impact storage, backup and replication.

Many of the ecosystem partners – the server, storage, backup, data protection and operating system vendors – realize this to some degree. But what can they do? They have to play nice. Especially since they are making a boatload of money. So they go about their business and hedge their bets by supporting Microsoft and Citrix to create a balance of power. Microsoft gets a thumbs up because it’s– well – Microsoft. It doesn’t matter if its product isn’t available and will have major limitations for one, two, or maybe even three years. Citrix is invited to the party because it bought XenSource and even though it doesn’t have a fully functional product, it gets a pass because it is a big company and everyone assumes that it will get there. VMware is fully supportive of this, telling the world that it wants healthy competition. But everyone knows—even though they won’t say it out loud—that VMware wins in this scenario.

Where does Virtual Iron fit into this picture? Right now, we are the little guy in a land of giants. Virtual Iron has a really good product. We have thousands of production implementations (and rapidly growing) and a healthy and increasingly strong channel. However, in spite of this, we are inconsequential to the ecosystem I’ve been talking about. But guess what? It really doesn’t matter.

Where we win – where we matter – is with small and medium enterprises (SME). They have no loyalty to VMware. They are looking for a server virtualization solution that has all of the advanced capabilities and features they need to protect and manage their environments; they want an easy to use solution; and it has to be cost effective so that it doesn’t consume the lion’s share of their IT budget. That is what we bring to the table and it is really a no-brainer for them once they get their hands on it. We also matter to the channel. Many of our channel partners feel that VMware is oversaturated. Since everyone is selling it, they can’t make any money. And their SME customers can’t afford VMware, so they are looking for an alternative. We are that alternative.

Our mission is clear to us. Virtual Iron is driving as hard (and hopefully as smart) as we can to build leadership in server virtualization for the SME market. The writer Voltaire said that, “common sense is not so common” and this is very true in the server virtualization market. We will watch the giants, but our core focus is on building our business through the real customers that don’t give a damn about anything but getting their jobs done. Common sense.