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TOP CONTRIBUTORS

Computer virtualization is a technology that enables multiple operating systems to run on one physical computer. This technology has several important implications:

  • It allows a computers' tasks to be abstracted from a physical machine. As a result, backup and disaster recovery are much more flexible and comprehensive, and data can be moved or restored to a different machine in a matter of seconds. This alleviates the need to have duplicate copies of every business critical machine and reduces IT costs.
  • Computer hardware resources are more flexible. A powerful computer can run multiple tasks concurrently across different operating systems such as Linux, UNIX, Windows, and Mac, at the same time.

Computer virtualization is just starting to gain widespread acceptance, and its main customers are telecommunications firms, pharmaceutical companies, and technology-related businesses.

Companies involved in virtualization

2006 breakdown of the $900MM server virtualization market
2006 breakdown of the $900MM server virtualization market
  • VMware Inc. (VMW) holds a commanding lead in the computer virtualization market. With its recent IPO, the company is well-positioned to continue its growth as the market for such products expands.
  • Microsoft (MSFT), Novell (NOVL), XenSource, and Red Hat (Linux) all participate in the virtualization market as well.
  • Apple (AAPL) could be developing its own virtualization software.


Trends and forces

Virtualization software holding fort in downturn

Which business software categories are bearing the brunt of the economic downturn in 2008? Enterprise Resource Planning, Document and Enterprise Content Management, and Customer Relationship Management Software have all been hard hit.

Image:Software spending areas.gif

But on the bright side, corporate spending for Virtualization Software has increased significantly, with VMware strengthening its domination over this market. This shows points to a significant trend that considering that Virtualization is in its growth stage, its relatively less vulnerable to the downturn.

[[Image: Virtualization vendors.gif]

None of the other major competitors have exhibited anything like this explosive growth, although Citrix (26%; up 5-pts) has also shown a jump in current share. Looking at planned corporate software purchases over the next 6 months, VMware (73%; down 3-pts) towers over the rest of the market, with better than a four-fold lead over its closest competitors. But once again, Citrix (15%; up 8-pts) is showing momentum going forward.

Thus, in a depressed corporate spending environment, Virtualization is one of the only software spaces showing an increase in purchasing going forward

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