Roy Schestowitz wrote:
> __/ [ Roy Schestowitz ] on Saturday 25 November 2006 18:46 \__
> > Virtual Machine Software Market Growth = 67% - IDC
> ,----[ Quote ]
> | The worldwide virtual machine software (VMS) market grew to $560 million
> | in 2005, a robust 67 percent growth over the previous year and topping
> | the 63 percent year-over-year growth recorded in 2004, according to
> | IDC. EMC/VMware was the top VMS vendor in 2005, with a market share
> | of over 55 percent.
> `----
Keep in mind that this is the revenue growth, wich is pretty
impressive. What could be even more extraordinary is the unit volumes.
Keep in mind that the average price of VM software in 2004 was around
$100 per machine. With the introduction of Xen, VMWare Player, VMWare
Server, and Bochs as well as other choices. If the average price has
dropped to $10 per machine, and you assume roughly 4 million units in
2004, then we could easily be looking at nearly 50 million units in
2005 and possibly as many as 100 million units by the end of 2006.
Remember these are annual increases, a cumulative amount, to roughly
200 million grand total.
It's pretty easy to see that Microsoft is not happy about the outcome,
but they understand that it's almost as inevitable as the Internet.
They have tried, unsuccessfully, to contain the damage, offering
Virtual PC to run Linux as a client to Windows, but it's becoming more
and more obvious that most implementations have been oriented toward
the ultimate aim of providing Linux as the primary OS with Windows
running as a guest. This is one of the reasons why Microsoft has
decided to try and collect additional revenue for this configuration.
Microsoft knows, better than anyone, how important virtualization is,
and the impact it will have on the industry. The Linux Host/Windows
Client is a very powerful and secure combination, which even Microsoft
has a hard time challenging. In fact, they really don't even try.
After all, the OEMs are still buying Windows XP and may soon be buying
Windows Vista Business or Ultimate (because no-one will want
Windows-Only machines anymore) in huge quantities.
> http://www.cio-weblog.com/50226711/virtual_machine_software_market_growth_67_idc.php
>
> > Microsoft will of course insist that virtualisation is not ready in the
> > same way it tries to make the Web go away (while trying hard to be part of
> > it, without any success).
Quite the contrary. Microsoft intends to squeeze an extra 20-40% out
of the market BECAUSE they know that Virtualization and inte-operation
with Linux is inevitable. On the other hand, because they have seen
this trend, they are willing to make the deals and charge a premium for
"VM-Ready" versions of Windows, and for support of "Linux Ready" PCs.
Microsoft's bigger concern at the moment is that if they DON'T open the
doors to Virtualization, that they may end up getting cut out of the
market altogether. Even now, businesses are not renewing support
contracts to the same degree as before, they are purchasing minimal
support for Windows, letting Office licenses lapse, and are even losing
revenue from Exchange and SQL Server.
Fortunately for Microsoft, the revenues from XBOX, XBOX Games, and Zune
are making up the shortfall, and as a result, the diversification
strategy has kept the revenue growing modestly, but nowhere near the
20% per year of the 1990s, or the 40% per year of even the slowest
growing segments of the Linux market, and nowhere near the 200% per
year unit growth rate in Linux Desktop software.
Microsoft has formally thrown open the doors to virtualization in it's
agreement with Novell. It also appears that Microsoft is now coming to
terms with the reality that Vista will not be able to topple the Linux
market, and that Linux will continue to grow unchecked. At this point,
Microsoft is now looking for the best way to stay relevent within this
rapidly shifting market.
Bill Gates is stepping away, but Steve Ballmer must be looking at this
in much the same way as a skier trying to outrun an avalanche. He
wants to get as close to rescue services as possible but must also be
ready to carve out space the instant that the snow begins to cover him.
The Novell deal gave Microsoft an "air hole", giving Microsoft the
time and the resources to adapt effectively to this new market.
It also looks like Microsoft is becoming more and more aligned with
Ballmer's personality as well. The focus has shifted from controlling
information critical to the conduct of business, to video games, music,
videos, and entertainment.
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