Probably not, but the small virtualization vendor appears poised for greater name recognition.
The virtualization market inspires a lot of speculation about the elbow-in-your-eye competition between the various players. Whos pulling ahead and whos running behind?
For example, is market leader VMware, having lost a passel of key staffers, about to suffer some erosion? (The chattering class seems to think so.)
Will Microsoft, once again late to market, eventually dominate with its still-nascent Hyper-V? (Divided opinion on total victory, but general agreement that Hyper-V will be a leader.)
And what about scrappy Citrix, with its $500 million purchase of open source XenSource can its virtualization revenues reach top levels? (Fair to partly cloudy based on industry scuttlebutt, but the jurys still out.)
Oh, and dont forget about Oracle. A dark horse in virtualization, but big-bucks customers will always take a phone call from this entrenched vendor. Also crowding the market are Red Hat, which just purchased virtualization firm Qumranet; and Dell, which leverages its server strength.
A vendor that usually gets mentioned toward the end of this list is Virtual Iron. Although the company launched a server virtualization product in 2006 and claims 2,000 clients its profile so far remains low.
Andi Mann, research director at Enterprise Management Associates, calls Virtual Iron a top five virtualization vendor. Yet its clearly back of the pack. Manns research firm conducted a survey that asked business executives: Which of the following server virtualization products, if any, do you have or are you planning to implement?
VMware ESX was top rated, with 82 percent; Microsoft Hyper-V garnered 32 percent, Citrix XenServer, 21 percent; Oracle VM, 11 percent; Virtual Iron scored 8 percent.
Despite its modest profile, Virtual Iron is taking aim at the market leader. One of Virtual Irons key sales pitches is
Comparable features to VMware, without the cost and complexity.
Certainly the price aspect of that claim is solid. Virtual Iron offers a virtualization product for $799 a socket. (Making an apples-to-apples price comparison in virtualization is difficult, because buyers face a blizzard of related choices and licensing issues, yet the $799 is clearly competitive.)
And the companys technology is at least comparable to other vendors, based on this recent chart from research firm Gartner:
[Editor's note: at Gartner's request, Datamation has replaced the chart originally posted in this article with a more recent chart.]
So given that the companys prices are competitive and its technology is roughly comparable, why is the Lowell, MA.based company so little known? I asked that question of Ed Walsh, Virtual Irons CEO.
I would say were the unsung hero, Walsh says. As a small company I have a lot of advantage against a big guy and I have some disadvantages. Microsoft can come out with a substandard product and get market share I cant. I would not have been able to get to 2,000 clients if my product did not do what it does.
The bulk of Virtual Irons 2,000 customers are small- and medium-sized businesses the SMB sector is the firms strongest. With 84 employees, Virtual Iron is itself a small business. By comparison, VMware has 6,300 employees and claims 120,000 customers. (And its owned by tech giant EMC, which boasts 400 sales offices worldwide.)
And that, simply put, may be why Virtual Iron has yet to build a profile equal to some of its competitors. In the virtualization market so far embraced more by bigger clients large enterprise favors large vendors. In this league, price is less of an issue.
Yet Walsh insists that Virtual Irons offering is comparable to VMwares. As he tells it, this David and Goliath pairing is closer than it seems due to the quality of Virtual Irons management software.
As any virtualization vendor will explain, the battle is no longer about the core hypervisor; now its whether you offer a multi-faceted management layer that implements rules and policies automatically. If youre elegant from the beginning, either by luck or by strength of engineering team, youre able to keep up toe-to-toe with the behemoth, Walsh says.
In truth, though, Virtual Irons closest competitor is not behemoth VMware but instead XenSource, which is owned by software giant Citrix. Both Virtual Iron and XenSource are based on the open source Xen hypervisor. And both are dwarfed by VMware, with its 75 percent of virtualization installations.
Yet XenSource has a towering size advantage over Virtual Iron. XenSources corporate parent Citrix, armed with a $3 billion market cap and 4,900 employees, is well equipped to push its offering into the emerging virtualization market. Walsh readily acknowledges the resource gap.
Citrix is putting hundreds of people on it and millions of dollars of marketing, he says. Theyve said This is the way to go but they dont have the functionality.
(That last bit from Walsh they dont have the functionality is a standard issue rotten tomato, which XenSource and Virtual Iron routinely hurl at each other. This past summer a minor contretemps broke out when XenSource CTO Simon Crosby suggested that Virtual Iron was mooching off the open source Xen project, a charge that VI exec Tony Asaro called dangerous and irresponsible.)
One advantage of Virtual Irons small size: with revenues at a lower starting point, its easier to create dramatic percentage increases. Since the firm is privately held its income cant be independently verified, but Walsh claims that revenues have been zipping upward at 25 percent, quarter over quarter, since late last year.
He expects this geyser of cash to continue. I know I can sustain a 25 percent quarter-over-quarter growth for quite some time, he says. Im over-accomplishing that now.
Moreover, theres big news on the way. Theres a couple things that will be announced in Q4-Q1, some larger relationships that will provide us larger validation and greater traction, Walsh says. But thats really built on a lot of sweat equity in what Ill say is a true VMware alternative without the cost and complexity of VMware.
The All-Important Management Software
Founded in 2003, Virtual Iron originally focused on server aggregation; its software enabled datacenters to create a pooled virtual machine from a room full of single processor servers. But as multi-core processors became the norm, Virtual Iron reversed course. In October 2006 it launched the open source Virtual Iron 3.0.
Its the companys background in server provisioning that now helps it compete in the sophisticated world of virtualization management.
Imagine a company that had a platform that would take all those disparate resources CPU, memory, network bandwidth, storage and aggregate up, Walsh says. Imagine all the complexity you had to keep track of in that environment, as you had all these boxes present up to key applications like Oracle, a big 16-way processing environment.
Handling complex tasks enabled Virtual Iron software to develop a top-flight management layer on its core hypervisor, Walsh explains. What we have, and what VMware has, is an architecture different than the others. We have a separate layer of management. VMware is using the term VirtualCenter. Ours is called VICenter. Its a control and coordination layer.
The all-important management layer provides intelligent oversight to the various OSes and applications sharing space on a server. It allows tasks like high availability of processing power, optimization (directing CPU resources where its needed most) and power conservation (shutting down machines on nights and weekends).
The technology looks like this, with the management layer being the VICenter:
But for Virtual Iron or any company to compete for top honors in virtualization management is a tough job. The reason: its what every last competitor has their eye on.
Everyone knows the hypervisor is yesterdays battle. What every [vendor] is going for is that management layer above thats where they can add value, says Dan Olds, lead analyst at Gabriel Consulting Group.
Currently its generally accepted that VMware has the best management layer. If you compare them to Oracle and Xen and Microsoft, theirs is probably the most comprehensive, Olds says. But the other thing that starts happening is, you start bumping up against HP, IBM, CA, and everybody else whos got management suites, trying to do the same thing.
The Holy Grail of virtualization is, in fact, meta-management. Its a solution that enables a company not to cobble together various vendors, but to buy one unified software tool that turns a datacenter into a single automated unit one that handles any flavor of any OS. (Which and this doesnt get talked about much also means fewer IT staff.)
Its about being able to manage that from one pane of glass as they say, Olds says. IBM is doing the same play with their IBM Director. What you dont have from VMwares standpoint, or at this point from Microsoft or even Oracle, is the ability to really manage all those other machines.
Virtual Iron: Acquisition Target?
Industry analyst Mann says he believes Virtual Irons claim that its virtualization solution is better than Microsofts, and that its (roughly) comparable to VMware without the cost and complexity.
Thats probably a reasonable statement in actual fact, he says.
Moreover, Virtual Iron has probably been smart to focus on the SMB market, he says, especially given the competition from heavyweights VMware and Citrix.
Yet that wont insulate the small vendor from Microsoft.
The problem for Virtual Iron is that Redmond is delaying the market. For longtime Windows shops, Microsofts claim that it now has a hypervisor with management capability with missing pieces on the way is tempting.
So some of these companies are potentially holding off until it delivers some of this stuff, Mann notes. So thats going to stall some people.
Where things will get even more difficult for Virtual Iron now is against [Microsoft] Hyper-V, Mann says. Obviously Microsoft has a very strong presence in small and medium business, as well as in large enterprise. In short, theres no place for Virtual Iron to hide.
There is the possibility of having success in specific verticals, in specific segments. Virtual Iron is looking for the SMB segment. [Virtualization vendor] Parallels is looking in the service provider market. There is room to be a niche player here. But as the market gets crowded by Microsoft, VMware and Citrix, that niche capability gets less acceptable and they need to be part of some bigger picture.
Yet its this possibility of being part of something bigger that offers a lucrative ray of hope for Virtual Iron, Mann says. The company makes a tempting acquisition target.
I can think of half a dozen vendors in software and hardware who might want to have Virtual Iron in their portfolio, he says. A player along the lines of IBM or HP might want to scoop up the company.
In the mean time, the virtualization market is a growth story amid generally sagging budgets. Perhaps the hefty growth will expand the customer base enough for all (or most) of the players.
Indeed, its early in the game. The industry analyst, and some of the vendors and the press, I think they tend to overstate how quickly these trends are adopted, Olds says.
The majority of customer are using virtualization to some extent, but in x86 a lot of them are still kicking the tires and using it in places that are kind of the low hanging fruit, like testing and development. Some will point to using it in production for mission critical, but my sense is that customers arent quite there yet, and its going to take years to get to that point.
James Maguire is the managing editor of Datamation.