Forrester Research has identified 18 categories of virtualisation ‘ripe for reseller channels to deliver’ – highlighting the ubiquitous nature of virualisation and the continuing role it will play for resellers.
John Brand, vice president and principal analyst for Forrester Research’s CIO Group, says those categories include the traditional desktop and server virtualisation, but extend the concept out to include storage, network, i/o, application, security, appliance and even virtualisation management as another category of virtualisation. "Then there are sub- and super-sets based on implementation models, such as hosted virtualisation and switch chassis virtualisation,” he adds.
"Because of the penetration of server virtualisation in mature markets like Australia and New Zealand, the opportunity for further commodity server virtualisation sales is reducing. We’ve reached near 100% penetration – though sales are still strong thanks to major build-outs (expansion of existing implementations).”
Phil Sargeant, Gartner’s research vice president, notes that while there is ‘very, very widespread penetration’ of server virtualisation in the New Zealand market, it is not necessarily broad penetration within an organisation. "There may only be 10% of machines virtualised – leaving 90% not virtualised,” he says. "Everyone strives to virtualise to a greater extent, but some workloads preclude virtualisation – requiring specialist applications or specialist hardware requirements, or being mission critical,” he says.
Name of the game
"To stay ahead of the game, resellers must read the signs of their customer’s longer term IT strategies. In many cases, this is leading them towards a more services oriented approach,” Brand says.
He says where resellers remain staunchly product oriented, opportunities will continue to grow around ancillary virtualisation products. "Forrester has identified 18 related virtualisation categories that are ripe for reseller channels to deliver, though growth is likely to be far less spectacular than the x86 server virtualisation market has been.”
Brand says growth for server virtualisation has driven both hardware and software sales. "However, software and services are increasingly being sought by end-user organisations. This will mean that resellers will need to look for opportunities to resell more complex software license-based products or they will need to convince organisations of the need to run more specialist appliance-based solutions.
"Whichever way resellers go, the market is changing back to a value, rather than a volume market. Demand for mobility and business intelligence has provided some good volume sales which will partially compensate, but the lack of commodity product options in these categories – similar to server virtualisation – has so far been elusive. We would expect this to improve but the complexity and range of solutions required will be significantly more diverse.”
Forrester’s Virtualisation in Asia Pacific 2010-2011 – End-user Adoption Trends report, which includes responses from 40 New Zealand organisations, says in terms of penetration, 63% of New Zealand respondents run more than half of their production apps in a virtualised environment – ahead of Australia’s 44% and 25% across ASEAN.
Email is the number one application currently running in a virtualised environment, at 50% and with no major deviations across the region. Enterprise apps, including ERP, CRM and SCM, are the second most cited category at 43%.
Among the verticals, virtualisation adoption across the region is highest, not surprisingly, in technology and education, both at 70%, with healthcare (13%), professional services (25%) and retail/wholesale (39%) all lagging.
Twenty-four per cent of A/NZ respondents have been using virtualisation for more than three years, versus only 11% in ASEAN.
Perhaps somewhat surprisingly, when it comes to verticals the largest percentage of respondents with three-plus years using virtualisation are utilities (27%) and manufacturing (22%) versus only 8% in telco and 10% in education.
Meanwhile, Gartner predicts the x86 server virtualisation infrastructure software market in Asia/Pacific will be worth $434 million in 2015, up from $251.8 million in 2010, but that the market will experience slowing growth later in the forecast period. The research company says providers will compete in terms of partnership and enablement, services capability and small or midsize business offerings in future.
Sargeant says the server virtualisation market has limited players, with VMware, Microsoft (‘You can’t stop the elephant in the corner of the room,’ Sargeant notes) and Citrix the key players. "In the desktop market there’s probably even less,” he notes.
VMware was the dominant player in x86 server virtualisation with 98.1% of Asia Pacific revenue share in 2010, and Gartner’s Competitive Landscape: x86 Server Virtualisation Infrastructure Software Market, Asia Pacific, 2011 report, says VMware’s dominance was the result of ‘its technology leadership and solid go to market strategy in the region’. Citrix was a distant second, with just 1% market share, with Oracle third with 0.4%. The acquisition of Sun Microsystems and Virtual Iron and their virtualisation technologies, had not provided significant revenue in the region at the time of the report, while Microsoft was missing from the market share picture ‘mainly because of bundling of Hyper-V and virtualisation solutions with its Windows Server and System Center products’.
Gartner says new entrant Red Hat’s installed base of Linux server customers should aid its competitive efforts in future.
Of Microsoft, Sargeant says: "The potential they have is not in the enterprise, where VMware is probably entrenched, but in the SMB arena and small business market.”
Forrester says desktop virtualisation continues to lag well behind servers, storage and applications, with 26% of current virtualisation adopters across the region evaluating desktop virtualisation – higher than any other category – but only 24% of these respondents are current users at either the department or enterprise level.
Meanwhile, Sargeant says a challenge with desktop virtualisation is to find a way to determine the real return on investment for customers. "It’s probably still a little unclear today if desktop virtualisation returns the same ROI as server virtualisation did.”