Virtualization Wars: Is Microsoft Sneaking Into More VMware Shops?

Even within enterprise data centers, where automation, high-level management and high availability often trump cost as buying criteria, free is a hard price to refuse, even for technology as complex and interconnected as virtual servers.

In the server rooms, wiring closets and semi-isolated cube farms of IT at small- and mid-sized companies, free is even harder to refuse. Add in simple, and for some customers, the balance tips.

“When I first looked at virtualization all I knew was VMware. For what I wanted I got a quote that was just too high,” according to Christian Boivin, vice president of JLR Recherche Immobilière (JLR Real Estate Data Builders), a Montreal-based company that collects, packages and resells data on land sales in Canada and the U.S.

“I would have had to buy a SAN, buy the licenses, the servers,” Boivin says. Instead of using VMware or taking a DIY approach with an open-source hypervisor like XenServer, Boivin hired VM6 Software, which sells software that configures existing Windows servers and storage into virtual infrastructures based on Microsoft’s Hyper-V, a free add-on to Windows Server 2008.

Boivin consolidated 12 physical servers into two pairs of mirrored virtual-machine hosts, two of which are located off-site as disaster-recovery vehicles, to house three terabytes of current data that includes 250GB databases of active, high-demand data served to appraisers, banks and real-estate brokers in Canada and the U.S.

What Free Leaves Out

It’s important to note that Hyper-V’s version of ‘free’ leaves out the management consoles, OS licenses and other add-ons required to run a virtual infrastructure that drive Microsoft costs much closer to VMware’s: Yet Microsoft is still a much cheaper alternative, according to Gary Chen, server virtualization analyst at IDC.

Also key to the buying decision: Microsoft has expanded Hyper-V’s abilities, but it still suffers in comparison to VMware’s superior automation and management functions, Chen says. (And VMware will no doubt roll out even more capabilities at its VMworld conference next week.)

Hyper-V is less able to do things like set priorities on which VMs should be restarted first after a crash. And, until a rush of support from independent software vendors recently, there were many fewer management and storage applications available for Hyper-V.

Most of the customers Hyper-V has drawn have been those most comfortable with Microsoft products, or those whose requirements were fairly low, Chen says.

“It’s gotten to be good enough for people who are looking for something that’s good enough,” Chen says. “It definitely did not grow as fast as people expected; it’s been pretty flat for the last couple of quarters, in fact.”

Hyper-V Sneaks Into Branch Offices

Small companies or those with simple IT requirements aren’t the only ones looking at Hyper-V more intently, however, according to James Staten, virtualization and infrastructure analyst at Forrester Research.

“A lot of companies are renegotiating their enterprise license agreements and seeing how big the bill is going to be for deploying a lot more virtualization,” Staten says. “When you have to true-up a license that says you’d use 500 servers and you used 600 and the plan is for 900, you might step back and wonder if you can control those costs a little bit.”

[ For timely virtualization news and expert advice on strategy, see CIO.com’s Virtualization Drilldown section. ]

Though a report published in July by Enterprise Strategy Group showed that, of clients who installed any virtual servers, 56 percent use hypervisors from more than one vendor, Forrester’s Staten doesn’t expect any wholesale migration to Hyper-V.

VMware’s automation, administration and upcoming abilities such as self-service, policy-controlled provisioning in the cloud-management product dubbed Project Redwood will continue to keep it in the lead with the data center crowd, he says.

However, even VMware-centric large companies will find Hyper-V sneaking in to virtualize servers in branch offices, or for support applications such as firewalls and spam servers that tight IT budgets might not stretch to cover.

“A lot of the clients we work with have heterogeneous virtual environments,” Staten says. “Not all of them necessarily realize it, but there is a lot of Hyper-V out there and third-party management companies are starting to notice. That’s why you’re seeing more of them announcing support for it as well as VMware.”

It may make sense to use Hyper-V for a few lower-priority servers, or to tier servers so that those with lower availability or disaster-recovery requirements run on Hyper-V, EMA’s Chen says.

“The problem with that is once you’re in that lower tier, you’re stuck there; there’s no easy way to move up,” he says. “Right now you can manage mixed environments; you can even move a VM from a Hyper-V machine to VMware, but it’s not a clean process and definitely not automatic or transparent.”

VMware realized its weakness in the mid-market earlier this year and launched lower-cost products in response, Chen says.

When VMware announced vSphere 4.1 in July it also announced it had slashed the cost of its lowest-level Essentials server license from $995 to $495, and added VMotion capability to the three-server Essentials Plus license package that also includes high-availability functions. Microsoft offers both LiveMotion and its HA functions free with Hyper-V.

As time goes on, however, many IT organizations will have to face more pressure from the business side to cut costs even on technology that has already cut costs dramatically, Staten says.

“When companies were doing lots of physical-to-virtual conversions they found massive cost savings from consolidation,” he says. “When they get to the point that they’re not taking servers out, just expanding VMs and start consuming lots of VM licenses, they start to see costs spiral and want to get that under control.”

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