Today, Gartner published the first-ever Magic Quadrant for the x86 Server Virtualization market, naming VMware as the only vendor in the leadership quadrant, with a sizeable advantage over all competitors. Simply put, from the most trusted voice in the IT market, VMware, the market leader!
According to this, VMware, the market leader and is clearly ahead in:
- understanding the market.
- product strategy.
- business model.
- technology innovation, product capabilities.
- sales execution.
Gartner also describes VMware strengths as:
- far reaching virtualization strategy enabling cloud computing, new application architecture and broader management.
- Technology leadership and innovation.
- high customer satisfaction.
- large installed base (especially global 2000), and rapid growth of service providers planning to use VMware (vCloud).
Gartner: VMware: Strong Results and Outlook; a Cloud Play?
VMware’s 1Q10 results were significantly better than expectations, as revenue growth increased dramatically. Gartner believes that VMware, while continuing to be the cornerstone of most enterprises’ virtualization initiatives, is proving to be leveraged by the burgeoning cloud-computing market, offering solutions within each of the three “cloud enabler” service layers.
Key Insights
- VMware’s 1Q results and the outlook for its business were well ahead of expectations, driven by stronger than expected carryover from the prior quarter. Despite the increasing expectations, Gartner continues to believe that VMware offers relative outperformance in the software group, with the ability to deliver better-than-expected revenue growth.
- In Gartner’s view, VMware is leveraged to the adoption and expansion of cloud-computing initiatives by offering solutions across three of the five services layers that comprise the cloud-computing infrastructure. The three service layers — application services, application infrastructure services and system infrastructure services — are defined as cloud-enabler services layers.
Gartner’s Recommendations
- Consider VMware solutions when implementing virtualization technologies for server infrastructure virtualization, server virtualization management and hosted virtual desktop solutions.
- Consider VMware when deploying public or private clouds, particularly across the platform as a service, integration as a service and application as a service layers, where VMware has strong solutions and where it will continue to focus and evolve its strategy.
Few market participants deliver solutions across all three cloud enabler service layers. VMware will likely leverage these synergies, and the opportunity to more tightly integrate its solutions will likely give it a distinct advantage. Additionally, Gartner does not believe that, when addressing the public cloud, VMware will pursue a strategy that involves the building of its own data centers; therefore, it will not likely provide hardware infrastructure services. As such, it is more likely to partner with the providers of these services than compete with them. This will enable VMware to expand its reach and leverage these partners as an important channel to distribute its solutions.
While the cloud-computing opportunity represents significant incremental growth for VMware, its core virtualization business continues to thrive, and demand remains robust. Gartner expects that the virtualization market (composed of the server virtualization infrastructure, server virtualization management, and hosted virtual desktop segments) will post 2010 growth of over 25% and total more than $2.5 billion. VMware controls nearly 90% of the market.
Despite Gartner’s aggressive predicted growth rate for the virtualization market, it may still prove to be a conservative estimate, as enterprises increasingly prioritize virtualization, as it is a key enabler for long-term corporate and IT objectives. Gartner believes that, as the IT spending environment improves, driven by better macroeconomic conditions, the virtualization market will likely accelerate as companies increase their short-term spending plans.
Gartner projects particularly strong growth in the server virtualization management segment, expected to achieve an adjusted gross revenue (AGR) of approximately 40% in 2010 to $543 million. VMware is the market leader, with over 90% share, and will benefit from the market’s above-industry growth rate.