VMware Rolls Out vSphere 4, Its Latest Server Virtualization Platform

| Apr 23, 2009 | Data Center | Competitive Intelligence Report

| Analyst: Steve Schuchart

Current Perspective: Positive
Vendor Importance: Very High
Market Impact: Very High

Event Summary

April 21, 2009 -- VMware has announced VMware vSphere 4, an operating system for building the internal cloud, enabling the delivery of IT as a service. VMware vSphere 4 will aggregate and holistically manage large pools of infrastructure – processors, storage and networking – as a seamless, flexible and dynamic operating environment. VMware vSphere 4 pricing starts at $166 per processor. VMware vSphere 4 is expected to be generally available later in Q2 2009 and will be available in six editions.

Analytical Summary

• Current Perspective: Positive on VMware’s release of vSphere 4, the latest iteration of the company’s popular VMware ESX server virtualization platform. Released as a “Cloud OS” product, vSphere 4 offers considerably improved IO, strong storage features such as thin provisioning, strong fault tolerance, dynamic load balancing to improve server efficiency, VShield Zones for security policy, and a host of other features. vSphere 4 removes some of VMware’s biggest drawbacks such as IO performance and represents a considerable effort to update nearly every aspect of the product. vSphere 4 is a substantial competitive threat to companies such as Microsoft, Citrix, Sun, and other server virtualization providers.

• Vendor Importance: Very high to VMware because vSphere 4 is the company’s flagship product that represents the majority of its sales and market recognition. The previous version, ESX Server 3 was starting to show signs of its age, despite its market dominating sales. vSphere 4 shows off VMware’s deep understanding of the server virtualization market and was a necessary product that will shore up VMware’s revenues even in this difficult economic climate.

• Market Impact: Very high on the server virtualization market because VMware is the dominant vendor in the space, and with the new vSphere 4 product, competitors will need to adjust their sales tactics in order to sell against the product. The market will most certainly see renewed interest in VMware and while the sales numbers may not be high in the first few months, after customers have evaluated vSphere there will be a climbing sales curve.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Data Center | More information

Recommended Competitor Actions

• Competitors to VMware should use price as the first and foremost as a weapon against VMware’s new vSphere 4 product. VMware has both the reputation and the actuality of being a pricey solution. This tactic will be particularly useful with smaller companies who are traditionally more sensitive to overall acquisition costs.

• It will be of the utmost importance for competitors to train their sales forces and channel partners regarding VMware vSphere 4. Some of VMware’s traditional weaknesses, such as IO performance are no longer competitive negatives. Vendors will need to have a competitive response for each of vSphere 4’s new features and capabilities, even if it is a reasonably near term roadmap item that can be confidentially shared with potential customers.

• Competitors will need to push hard on the deals they are trying to make right now. vSphere 4 is not yet available and will not be available until later in Q2. The pending availability of vSphere 4 may “freeze up” current talks, and competitors to VMware really need to get those deals sealed before the release of vSphere 4 or risk having to do the entire sales cycle over again, but this time against vSphere 4.

• Competitors will need to continue to develop their products and like it or not will need to match VMware feature for feature rather than claiming that VMware’s approach is not practical or optimal. Feature parity is the way to compete in the market at this point. VMware is the creator of the virtual server market and its current leader until someone takes the lead away from them. Until then feature parity is a necessity.

Recommended End User / Customer Actions

• Current customers of VMware ESX Server 3 should first take a long and in depth look at the new features and performance gains that vSphere 4 brings. New features mean almost nothing if they are not a planned implementation. Simply upgrading without changing how things work will not take advantage of the new features as completely as possible.

• Customers who are not fully virtualized and are considering using vSphere 4 for a full virtualization project should take advantage of either VMware or authorized VMware partner planning and consulting services. A successful implementation cannot take place without first good planning and best practices on the existing infrastructure.

• Customers who are not virtualizing or only have a portion of their data center virtualized need to make sure that they take into account not only VMware’s vSphere, but Citrix’s Xen, Microsoft’s Hyper-V, Virtual Iron, Sun’s xVM, and Parallels’s Virtuozzo Containers. A paring of the list down to two is in order and then on-site testing for the remaining two.

• Customers who have an almost entirely virtualized data center should consider vSphere 4. The performance and fault tolerance improvements of the product could very well allow virtualization of the rest of the data center.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Data Center | More information

Top