Virtualization: Challenging VMware's dominance

While VMware pursues its sales strategy in down times, it seems most other vendors in the virtualization galaxy are pursuing VMware. The common pitch is to talk about cost savings versus comparable VMware installations.

Take Virtual Iron's Chris Barclay, for example: He touts that his company's Enterprise Edition software costs about $800, compared to VMware's minimum $3,000 price tag.

"Our price comes in at VMware's maintenance cost," he says.

Fortisphere's Lilac Berniker notes that her company's product "costs a fraction of the price of the VMware platform," assuring customers of an even quicker ROI.

And then there's Microsoft. "The options in the past were limited to a closed proprietary version from VMware," Microsoft's Zane Adam says. "With Microsoft and Citrix you get machines that can move back and forth, and you can save 50 to 60 percent with our platform versus VMware. Customers get everything they ever had, along with the management of the service."

Such challenges, especially from the Microsoft juggernaut, have raised questions about VMware's long-term prospects. Although still acknowledged as the industry leader, with somewhere around 80 percent of the market share, popular speculation centers on how long VMware can maintain its grip.

VMware has acknowledged the competition. Last July it announced it would offer its embedded hypervisor, ESXi, for free, as a means of luring customers in for other products, such as VMware Infrastructure.

VMware's John Gilmartin dismisses the idea that his firm's days as a leader are numbered. "Our vision of bringing out new products and innovation will allow us to maintain a pretty good technology lead," he says.

Those interviewed for this article weren't ready to write off the industry leader, either -- not even Microsoft. The consensus? VMware may see its share shrink some, but it will be a lesser share of a greater market.

"I'm not going to predict [VMware's] demise," says Barclay. "Companies like us are going to be taking business from them and Microsoft is forecasted to take a bigger share of the pie, but I believe the pie itself is getting bigger."

Hyper9's Dave McCrory takes the view that there's room for everybody, especially for firms like Hyper9, which is developing products that can be used across different platforms. "People are looking to have mixed environments," he says. "We want to support them all."