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Microsoft, Others Closing In On VMware In Server Virtualization Market

VMware has long ruled the server virtualization market. Learn how Microsoft, Citrix and KVM may change and have already helped level pricing.

VMware's licensing increase "was met with such hostility and derision from customers," McTigue notes, that the company was forced to shelve the new pricing for the time being. While acknowledging that VMware is the "go-to name when IT talks enterprise-class server virtualization," he maintains that at some point, Microsoft's Hyper-V will be a good-enough alternative.

Microsoft is giving away Hyper-V with Windows 2008, and like IBM, HP, Red Hat and others, is selling infrastructure and management products. That means the virtualization market is no longer a two-horse race between VMware and Citrix, says Clabby.

When deciding to virtualize an IT environment, companies should look at a vendor's market share, product functions and cost, he says. KVM "is going to gain steam because it's the right price and a lot of people got [angry] with VMware last year when they tried to jack up prices," Clabby says.

McTigue sees price being the main advantage in using an alternate hypervisor to VMware. "Even with the new vSphere 5 licensing constraints raised, Citrix can still beat VMware by more than 10% on price, and Microsoft can come out ahead by 50% in deployments of all sizes,'' he says. "That level of savings is a more than sufficient business driver to justify a big move--the ROI will be measured in months for some deployments."

But McTigue adds that when comparing hypervisor licensing costs, even if deploying Hyper-V generates a significant savings, enterprises should give VMware and Citrix an opportunity to compete. "Odds are, you can have the hypervisor of your choice at something close to the price of the low bidder. Competition is just that stiff right now."

Learn more about Strategy: Storage Virtualization Guide by subscribing to Network Computing Pro Reports (free, registration required).

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