How Microsoft's Hyper-V Could Beat VMware

Before the July 4^th holiday, I wrote about how a new battleground is taking shape between Microsoft (MSFT) and VMware (VMW).  This looming battle is part of a bigger campaign between Microsoft and Google (GOOG) over the spoils of cloud computing and the future shape of information technology.  If Microsoft can establish Hyper-V as a dominant data center platform and support that platform with a robust eco-system of solutions, players and data center relevant capabilities it could interrupt VMware’s ascent into the clouds.

As Microsoft battles yet another well-heeled upstart with momentum it still needs a few favorable developments.  For starters, it needs VMware’s successful data center invasion to slow long enough for it to catch up and deliver a viable enterprise-ready data center virtualization solution.  The gang in Redmond would be hoping for VMware to stall on the beach with what I recently called virtualization-lite, or the scaled back promise of virtualization driven by virtsec (virtualization security) challenges.

If VMware gets stranded on the data center beach with virtualization-lite deployments becoming the norm, Hyper-V would then have a bigger market waiting for it when it’s ready to expand out of the low cost SMB market and into the multi-billion data center space. 

This potential dynamic could establish a common interest between Google and VMware, especially around data center-critical features and functionality, including virtsec.

That dynamic would make virtualization security strategic to the even bigger picture cloud race between Microsoft, Google and perhaps others.  Thus far, Microsoft has been very quiet about virtsec; one wonders if this is by design or default.  In the coming months expect Microsoft to start talking openly about their plans to address various cloud and data center issues, from security to management and I/O.

Earlier I blogged about the impact of cloud computing on security and it’s not a pretty sight thus far.  It is one thing to deliver low value applications in the cloud with minimal security requirements, yet quite another to deliver business apps and databases.  By waiting and focusing on price and the Server 2008 extension gambit Microsoft may merely be waiting for a virtsec fumble to slow virtualization adoption.

That means that VMware’s execution when it comes to critical data center requirements (including security) will be instrumental to their long term success versus Microsoft.  Their success in coming quarters could also give Google another front to wage against Microsoft as it builds out its massive data centers.  If VMware fumbles, Hyper-V could make substantial inroads and apply more competitive pressures earlier in the market.  If VMware continues to excel, Google could be an even more formidable foe.

The next few quarters ought to be quite interesting… for VMware, Microsoft and Google.

Disclosure: none

Comments

[Tom B:]

VMWare's gonna win this one. MSFT is on the decline, and the decline will be faster than anyone imagines, with Monkey-Boy in the CEO's chair.

2008 Jul 08 10:58 AM

[yohoho:]

VMWare is gonna eat dirt, and fast. The price is RIGHT with Microsoft's solution. Ask any CIO, if they are willing to receive a 50% discount for 80% of the functionality... and with Software Assurance... those same CIO's feel confident that the remaining 20% of functionality will not cost them a single penny more.

Game set match.

2008 Jul 08 10:18 PM

[GNESS:]

I think it will come down to innovation and marketing. And this battle is important because of the coming battle with GOOG: gregness.wordpress.com.../

Thx
Greg

2008 Jul 10 08:37 PM