Research

Publication Date: 30 June 2011 ID Number: G00213635

Magic Quadrant for x86 Server Virtualization

Infrastructure
Thomas J. Bittman, George J. Weiss, Mark A. Margevicius, Philip Dawson

The number of installed server VMs and containers has nearly doubled in the past year
as competition improves, virtualization adoption expands, the midmarket heats up,
desktop virtualization drives more workloads to servers and workloads are deployed by
cloud computing providers.

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WHAT YOU NEED TO KNOW
As of mid-2011, at least 40% of x86 architecture workloads have been virtualized on servers;
furthermore, the installed base is expected to grow five-fold from 2010 through 2015 (as both the
number of workloads in the marketplace grow and as penetration grows to more than 75%). A
rapidly growing number of midmarket enterprises are virtualizing for the first time, and have
several strong alternatives from which to choose. Virtual machine (VM) and operating system
(OS) software container technologies are being used as the foundational elements for
infrastructure-as-a-service (IaaS) cloud computing offerings and for private cloud deployments.
x86 server virtualization infrastructure is not a commodity market. While migration from one
technology to another is certainly possible, the earlier that choice is made, the better, in terms of
cost, skills and processes. Although virtualization can offer an immediate and tactical return on
investment (ROI), virtualization is an extremely strategic foundation for infrastructure
modernization, improving the speed and quality of IT services, and migrating to hybrid and public
cloud computing.

MAGIC QUADRANT

Figure 1. Magic Quadrant for x86 Server Virtualization Infrastructure

Source: Gartner (June 2011)

Market Overview
The x86 server virtualization infrastructure market is the foundation for two extremely important
market trends: infrastructure modernization and cloud computing. For infrastructure

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modernization, virtualization is being used to improve resource utilization, improve the speed of
resource delivery and encapsulate workload images in a way that enables automation.
Virtualization is also being used as a basis for cloud computing ² both private and public. In the
last year, the number of server virtual containers and VMs more than doubled, due to:

Growth in workloads
Rapid growth in customer adoption

Increased use of hosted virtual desktops (HVDs; on servers)

Increased use of cloud IaaS

Significant growth in midmarket enterprises beginning to virtualize for the first time

Maturity of product offerings

Interoperability between service providers and enterprises is becoming more important, as
enterprises plan to build architectures that can enable workload migration to and from cloud
providers, and hybrid cloud computing ("cloudbursting").
x86 server virtualization infrastructure provides the foundation for new management and
automation tools, new security architectures and new process methodologies. Although the
technologies in the x86 server virtualization infrastructure market are simply enablers, these
technologies will be used by vendors to drive customers to higher-level management and
automation technologies. Choices made at the lower layers matter.
The market is becoming very competitive ² both in terms of product offerings and in terms of
overarching visions for the road map to cloud computing. VMware remains the market share and
technology leader, but the market is growing rapidly, and competitors like Microsoft and Citrix
Systems have a larger share now than they did a year ago. While the majority of Global 1000
enterprises have been virtualizing for several years, many smaller enterprises and those in
emerging economies are just starting out, or haven't started yet. These enterprises have several
viable alternatives from which to choose. In addition, as the cloud computing paradigm continues
to evolve, cloud service providers offering IaaS want to make interoperability with their service
offerings easy. A key trend in service providers is a shift to support better interoperability with
existing enterprise virtualization infrastructures ² in many cases, expanding their support for the
same technologies that enterprises are using.

Market Definition/Description
The x86 server virtualization infrastructure market is defined by organizations that are looking for
solutions to virtualize applications from their x86 server hardware or OSs, reducing underutilized
hardware and associated costs, and increasing flexibility in delivering the server capacity that
applications need. In 2011, we are adding HVDs (in server VMs) to the list of workloads covered
by this market.
Solutions for this market leverage:

Hypervisors to create VMs

Shared OS virtualization technologies (also called "containers")

Server virtualization administrative management (base frameworks)

Server virtualization embedded management (live migration and basic automation of
administrative management functions)

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Not included are higher-level management functions, such as operational automation tools that
deal with virtual resources, application performance tools that leverage and monitor virtualization,
disaster recovery tools that leverage virtualization, desktop provisioning and brokering software,
etc.

Inclusion and Exclusion Criteria

Vendors that were eligible for inclusion in this Magic Quadrant met the following criteria:
They must provide x86 server-based solutions to virtualize applications from OSs, or
OSs from x86 server hardware, using:

Hypervisors

Container technology

They must provide basic administrative tools for those solutions:

Administrative management frameworks/suites for hypervisors/containers

Embedded virtualization management technology (e.g., live migration)

They must have at least 100 different organizations using their generally available
products as of 1 April 2011.
Open-Source Communities (e.g., Xen and KVM Hypervisors) Versus Vendor-Embedded
Open-Source Software Business Models

The x86 server virtualization infrastructure Magic Quadrant includes only commercial vendor-
based offerings, and not individual positions and evaluations for open-source software (OSS)
projects, such as KVM and Xen. The omission of Xen and KVM as OSS projects follows the
same decision used in the 2010 Magic Quadrant (see "Magic Quadrant for x86 Server
Virtualization Infrastructure"). To reiterate, open-source projects would be penalized in the Magic
Quadrant as a consequence of being a community-sponsored development, compared with the
specific financial and marketing goals of vendors using the same underlying technology. Magic
Quadrant positions established for Oracle and Citrix for Xen, and Red Hat for KVM achieve
higher scores in marketing understanding, marketing strategy and sales strategy, compared with
the open-source versions of Xen and KVM. Only skilled organizations that use OSS tools, or
customized their own, will succeed without commercial vendor support.
External service providers (ESPs), startups and entrepreneurs who have the necessary in-house
skills can use open source to develop, test, configure, build and maintain their own environments.
Since ESPs are more likely to have the technical skills and shave margins in their services and
product offerings to keep costs low, they will most likely develop and deploy their automation
tools on a license-free OSS version of the hypervisor.
Users have the choice of selecting either vendor-specific implementations of virtualization or
OSS-community-supported projects, including the types of virtualization (OS hosted versus
hypervisors) inclusive of monitoring and management tools, or a build-your-own approach, with
self-maintenance or support of ESPs. The self-maintenance and integration approach avoids
subscription support licenses and vendor dependencies, but will add to internal support costs if
skills are minimal or infrastructures are poorly implemented, resulting in more-frequent outages
and downtime.

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Dropped
Novell
Attachmate (formerly Novell)

Since last year's Magic Quadrant, we have reconsidered the inclusion of SUSE (formerly Novell)
and decided to omit it. There are several reasons for the omission:

SUSE originally based its strategic virtualization direction on the Xen hypervisor (since
2003) as part of the SUSE Linux Enterprise platform (well before the advent of KVM in
2007), but now offers a richer, heterogeneous, hypervisor-neutral approach to
virtualization (with both Xen and KVM).

The evolution of the heterogeneous approach has led to a strategy that is called the
"perfect guest," in which SUSE Linux can be employed as a guest on all major
virtualization platforms, as a more strategic direction going forward.

SUSE has formed alliances with Citrix, Microsoft and VMware to deliver cooperative
support of SUSE Linux Enterprise as a guest OS on each of their hypervisors.

The perfect guest virtualization strategy will be targeted as a business by delivering

management tools above the hypervisor layer in multivendor, heterogeneous
environments.

The Attachmate Group's acquisition of Novell closed 27 April 2011, and has created a
separate business unit around SUSE Linux Enterprise and the former Open Platform
Solutions unit of Novell, while virtualization management has been transferred to NetIQ,
another business unit of The Attachmate Group. This represents an organizational shift
from how Novell approached virtualization management, to an integrated approach
expected from NetIQ.
Thus, it is premature to evaluate SUSE's vision and execution (e.g., marketing, sales, etc.) for the
Magic Quadrant until a greater level of market understanding is achieved. Here's what to watch
for from The Attachmate Group's SUSE and NetIQ business units related to virtualization:

How NetIQ delivers automation tools for virtualization and WorkloadIQ (formerly
Intelligent Workload Manager)

How SUSE prioritizes and enhances marketing and sales resources from its
headquarters in Nuremberg, Germany

How NetIQ (Operational VMware Management) will integrate the Novell virtualization
solutions as part of its virtualization strategy

How the Microsoft relationship of cross-platform heterogeneity and management

progresses for SUSE's and NetIQ's benefits to customers

Evaluation Criteria
Ability to Execute
We evaluated technology providers on the quality and efficacy of the processes, systems,
methods and procedures that enable IT provider performance to be competitive, efficient and
effective, and to positively affect revenue, retention and reputation. Ultimately, technology
providers are judged on their ability and success in capitalizing on their vision.

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Ability to execute in server virtualization is not simply about product features, but also very much
about maintaining a constantly changing business model in a very dynamic trend. Good products
could fail, and poor products could be very successful, based on effective vendor execution.
Product/Service: Core goods and services offered by the technology provider that compete
in/serve the defined market. This includes current product/service capabilities, quality, feature
sets, skills, etc., whether offered natively or through OEM agreements/partnerships. Key factors
that are evaluated include: range of OSs and applications supported; scalability and efficiency;
elasticity; maturity; embedded resource management; management features to reduce
administrative burden; ability to administer the holistic, virtualized ecosystem; administrative
scalability; and integration with third-party enterprise management providers.
Overall Viability (Business Unit, Financial, Strategy, Organization): An assessment of the
overall organization's financial health, the financial and practical success of the business unit, and
the likelihood of the individual business unit to continue to invest in the product, continue offering
the product and advance the state of the art within the organization's portfolio of products.
Sales Execution/Pricing: The technology provider's capabilities in all presales activities, and the
structure that supports them. This includes deal management, pricing and negotiation, presales
support, and the overall effectiveness of the sales channel. Customers included are both
enterprises and service providers.
Market Responsiveness and Track Record: The ability to respond, change direction, be
flexible and achieve competitive success as opportunities develop, competitors act, customer
needs evolve and market dynamics change. This criterion also considers the provider's history of
responsiveness.
Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver
the organization's message to influence the market, promote the brand and business, increase
awareness of the products, and establish a positive identification of the product/brand and
organization in the minds of buyers. This mind share can be driven by a combination of publicity,
promotional, thought leadership, word-of-mouth and sales activities.
Customer Experience: Relationships, products and services/programs that enable clients to be
successful with the products evaluated. Specifically, this includes the ways customers receive
technical support or account support. This can also include ancillary tools, customer support
programs (and the quality thereof), the availability of user groups, service-level agreements, etc.
Operations: The ability of the organization to meet its goals and commitments. Factors include
the quality of the organizational structure, such as skills, experiences, programs, systems and
other vehicles that enable the organization to operate effectively and efficiently on an ongoing
basis (see Table 1).

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria Weighting
Product/Service high
Overall Viability (Business Unit, Financial, Strategy, high
Organization)
Sales Execution/Pricing high
Market Responsiveness and Track Record low
Marketing Execution high
Customer Experience standard

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 Evaluation Criteria Weighting
Operations low
Source: Gartner (June 2011)

Completeness of Vision
We evaluated technology providers on their ability to convincingly articulate logical statements
about current and future market direction, innovation, customer needs, and competitive forces,
and how well they map to the Gartner position. Ultimately, technology providers are rated on their
understanding of how market forces can be exploited to create opportunities for providers.
In the server virtualization market, vendor understanding and articulation of the strategic path for
virtualization (expanding into the foundation for the future of infrastructure architecture and
operations, and extending toward cloud computing) is particularly important and differentiating.
Market Understanding: The ability of the technology provider to understand buyers' needs, and
to translate those needs into products and services. Vendors that show the highest degree of
vision listen to and understand buyers' wants and needs, and can shape or enhance those wants
with their added vision. The market includes enterprises with their own strategies to build private
cloud solutions, and cloud computing providers.
Marketing Strategy: A clear, differentiated set of messages consistently communicated
throughout the organization and externalized through the website, advertising, customer
programs and positioning statements.
Sales Strategy: A strategy for selling products that uses the appropriate network of direct and
indirect sales, marketing, service, and communication affiliates that extend the scope and depth
of market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy: A technology provider's approach to product development and
delivery that emphasizes differentiation, functionality, methodology and feature set, as they map
to current and future requirements. Interoperability between enterprises and service providers
(and between providers) is also growing in importance.
Business Model: The soundness and logic of a technology provider's underlying strategic
business proposition.
Vertical/Industry Strategy: The technology provider's strategy to direct resources, skills and
offerings to meet the specific needs of individual market segments, including verticals (both
enterprises and service providers).
Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or
capital for investment, consolidation, or defensive or pre-emptive purposes.
Geographic Strategy: The technology provider's strategy to direct resources, skills and offerings
to meet the specific needs of geographies outside the "home" or native geography, either directly
or through partners, channels and subsidiaries, as appropriate for the geography and market (see
Table 2).

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria Weighting

Market Understanding high
Marketing Strategy high

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 Evaluation Criteria Weighting
Sales Strategy standard
Offering (Product) Strategy standard
Business Model standard
Vertical/Industry Strategy standard
Innovation standard
Geographic Strategy low
Source: Gartner (June 2011)

Leaders
Citrix and Microsoft have joined VMware in the Leaders Quadrant by increasing vision and
execution respectively. Although market share leader VMware continues to set the standard in
products and the pace in terms of strategy, Microsoft has increased its market share (especially
among midmarket customers new to virtualization), and Citrix is leveraging its desktop
virtualization strengths and its free XenServer offering to expand its server virtualization share.
The road map from virtualization to cloud computing is rapidly evolving, and executing will be very
important during the next year as this market continues to rapidly evolve and grow.

Challengers
Now that Microsoft has moved from the Challengers Quadrant into the Leaders Quadrant, there
are no obvious Challengers on this Magic Quadrant. However, with the delivery of richer
functionality, better sales execution and market share, and increased marketing, Oracle could
become the next market challenger.

Visionaries
Citrix has increased its execution to move into the Leaders Quadrant. The most likely potential
Visionary is Red Hat, which has begun to talk about an expanded vision of virtualization ²
CloudForms ² and has joined several other vendors in an Open Virtualization Alliance.

Niche Players
Oracle, Parallels, and Red Hat remain Niche Players in this market. Parallels continues to be a
strong choice for service providers focused on high-density deployments of specific applications,
and it will likely leverage that strength to expand its offerings over time. Oracle remains an option
for Oracle application and DBMS stacks on Oracle Linux. Red Hat is being considered for
predominantly Red Hat consolidation and migration implementations.

Vendor Strengths and Cautions

Citrix Systems
Citrix is leveraging its position in desktop virtualization to grow its foothold in the server
virtualization market as the third-place vendor in terms of market share. In addition, activations of
the free edition of XenServer have improved Citrix's market share. However, converting those
new customers to paying customers remains a challenge. In the past year, Citrix has released
XenServer 5.6 and 5.6 Feature Pack 1, including scalability improvements and dynamic memory
control.

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Key to Citrix's strategy is its ability to leverage a very large and loyal customer base of all its
products (of which there are more than 200,000). These customers typically use a variety of Citrix
products/technologies, with XenApp as the product holding most of the mind share. Although
Citrix has been successful selling XenApp, the company recognizes that the market opportunity
for the desktop is much larger than XenApp can address, so Citrix requires a position within the
hosted virtual desktop (HVD) market to grow its installed base.
To that end, Citrix offers XenDesktop as an umbrella set of technologies that are needed to
deliver the desktop; it includes XenApp, Provisioning Services, XenClient (a Type 1 hypervisor for
PCs) and XenServer. Citrix's strategy has served it well, since XenDesktop has emerged as the
product of choice for most HVD customers. This rapid adoption of XenDesktop has carried
XenServer into VMware-centric organizations. And while VMware ESX continues to be a broadly
used hypervisor in XenDesktop deployments, many enterprises are beginning to question the
viability of supporting a different VM infrastructure when they could reduce costs by using
XenServer.
Further, Citrix has expanded on its vision for private cloud computing with Project Olympus, its
commercial offering of OpenStack. One goal is to become the "open" alternative to Microsoft and
VMware. However, there is competition for that mantle, as Red Hat promotes KVM and its own
vision for openness in virtualization and cloud computing.
In server virtualization, Citrix and Microsoft have a somewhat complicated relationship. While
Citrix supports Hyper-V and has a long-term partnership with Microsoft, winning at the desktop
hypervisor layer is also important if Citrix is going to expand its management, automation and
cloud business further. As a result, Citrix's go-to-market strategy regarding how it competes
with/complements Microsoft remains confusing for many customers and channel partners.
Marketing and sales execution remain key future success factors for Citrix.

Strengths
Vision for becoming the "open" alternative for virtualization through to cloud computing

Rich product capabilities for relatively low cost (starting with free XenServer edition)

Ability to leverage its desktop virtualization market position and installed base for
XenServer sales

Bundling of XenServer with other Citrix products

Very large and loyal channel

Cautions
Business model ² converting free product activations into revenue for maintenance and
management tools

Marketing execution and reach

Open-source software (OSS)-based competition (especially from Red Hat with KVM)
Continued market and strategy complexity in its partnership with Microsoft

Microsoft
Microsoft has been growing market share significantly since its launch of Hyper-V in 2008, and
the subsequent addition of live migrations in Hyper-V R2 in late 2009. The company's success

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has been primarily occurring among midmarket customers new to virtualization, where it is
winning at least 30% of the time.
One of Microsoft's key strengths ² its low price ² is also a weakness when it comes to
influencing the channel to promote its product, rather than its competition. However, when
evaluated objectively, Hyper-V and System Center Virtual Machine Manager (SCVMM) usually
meet the requirements for midmarket or branch office deployments. In the past year, Microsoft
has also released Windows Server 2008 Service Pack 1, with enhancements such as dynamic
memory for Hyper-V. At the hypervisor and basic administration level, Microsoft has closed most
of its technology gaps with market leader VMware (which tends to have an advantage with
higher-level management and automation tools). The most significant hypervisor difference
continues to be Microsoft's reliance on a parent operating system on each virtualization host ²
which carries the benefit of a proven driver architecture, but the burden of potentially more
planned downtime for patching and maintenance (however, Microsoft's patch record to date for its
parent operating system has been good).
In the past year, Microsoft has begun to lay out a broader virtualization road map for cloud
computing, including Hyper-V Cloud, which includes some technology, white papers, consulting
services and partnerships. While the vision is coming together, Microsoft's Hyper-V customers
tend to be smaller enterprises or branch offices in larger enterprises ² where private cloud
computing is less likely to be deployed. Microsoft's challenge to become a leader in private cloud
computing will be to convert existing VMware users to Hyper-V and System Center. In addition,
service providers are cautious about leveraging Hyper-V for their own cloud-based offerings,
given that Microsoft is a major service provider competitor with Microsoft Azure.

Strengths
Administrative environment that is familiar to Windows administrators

Midsize enterprise installed base of Windows

Strength of solution and price for midsize enterprises

Company financial strength

Cautions
Difficulty converting or surrounding strong VMware installed base, especially in large
enterprises

Competing with VMware for channel and service provider influence

Hypervisor dependence on a running copy of Windows as a parent operating system

Oracle
Oracle Virtual Machine (Oracle VM) is Oracle's implementation of the Xen hypervisor that also
leverages intellectual property acquired from Sun Microsystems and Virtual Iron. Oracle has been
gradually integrating these technologies into a more coherent and packaged solution ² but the
resulting products haven't been shipped yet. Oracle is converging on Oracle VM Manager to
manage its virtualization portfolio. This includes Oracle VM (an x86 architecture product, based
on Xen, which is covered here), Oracle VM Server for SPARC (based on Sun LDOM technology),
Oracle Solaris Containers and potential software appliances using Oracle VM, storage and other
related virtualized infrastructure. This management unification is an important direction and
foundation for Oracle virtualization products, because it builds an integrated approach to selling
virtualized DBMS and application server hardware, software solutions, attached storage, and

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Oracle-based management solutions. Among competitive x86-hypervisor-based solutions, Oracle
has chosen to certify its software solely on Oracle VM. Most of the customer references that
Gartner investigated stated that certification was their primary reason for choosing Oracle VM.
In addition, Oracle favors Oracle VM for software licensing and pricing, for example, with
processor pinning (allowing the specification of a limited number of processors being used by a
VM, which can reduce software costs). Oracle's corporate strategy is "integrated but open," which
encompasses the company's infrastructure stack. While Oracle solutions are optimized to work
with one another, they still work with supported third-party vendors as well. Oracle VM is a solid
and maturing solution for Oracle-centric architecture, and it is becoming a valuable component of
an integrated Oracle-managed architecture as more management features are added. We are
receiving a growing number of inquiries from clients considering and using Oracle VM. Several
clients have reported difficulties in migrating and managing storage when using Oracle VM live
migration, but we expect this to be addressed in the forthcoming release.
For 2011, we have combined our analysis of Oracle in this Magic Quadrant based on Oracle VM
(predominantly) with Oracle Solaris Containers (specifically for the x86 architecture). There is a
large and respectable legacy installed base running Oracle Solaris Containers predominantly on
SPARC, but a much smaller installed base running Oracle Solaris on x86 that we focus on for this
Magic Quadrant. Oracle Solaris Containers offers a lightweight solution that sacrifices portability
and application coverage for price, ease of use and multiversion Oracle Solaris support. As part
of the Oracle portfolio, Oracle Solaris Containers offers shared operating system virtualization
capabilities for tactical x86 deployments. Oracle Solaris Containers provides differentiated
benefits for x86 Oracle Solaris users ² higher virtualization density, and reduced operational
costs due to fewer operating system instances ² something that hypervisor-based solutions
cannot do (however, this technology is available for Oracle Solaris on x86 only, and not Oracle
Linux). In this sense, Oracle Solaris Containers and Oracle VM can be complementary solutions,
targeted at different application requirements.

Strengths
Preferential licensing and certification of Oracle software using Oracle VM

Oracle's overall software installed base and financial strength

Strong solution in Oracle-managed stack

Oracle Solaris Containers complements Oracle VM as a lightweight alternative to a

hypervisor

Cautions
Oracle focuses on an "Oracle only" virtualization market and user requirements

Oracle has been slow to the market with promised product enhancements to Oracle VM
(notably Storage Connect)

Parallels
Parallels Virtuozzo Containers is a shared operating system virtualization solution available for
Linux or Windows operating systems. It allows multiple applications to run in lightweight, separate
containers offering processor affinity and memory protection and isolation. Compared with
hypervisor-based solutions, Parallels Virtuozzo Containers can reduce operating system software
and administration costs, in much higher densities. Parallels also offers portability and live
workload migration. The whole architecture of containers allows a workload and container the
ability to spin up faster with less performance overhead than VM solutions.

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Originally, Parallels Virtuozzo Containers focused strictly on the service provider market. With the
growth of enterprise virtualization, Parallels entered that market several years ago, without much
success. Since last year's Magic Quadrant analysis, Parallels has shifted its strategy to refocus
on service providers exclusively. This focus has been a popular decision among its service
provider customers, who felt that the lack of focus was making Parallels less responsive to their
requirements ² but it is much improved now. As cloud computing evolves, Parallels is positioned
well with service providers, but may eventually need to expand its footprint into enterprises
building large, hybrid cloud computing environments. For smaller businesses that may move
more services to cloud service providers, Parallels will need to influence them (through channels,
service providers, etc.) to move to Parallels-based solutions. For now, Parallels offers the best
solution for service providers building high-density, but isolated, solutions around common
workloads, such as Web serving.
Parallels Server 4 Bare Metal which is based on a hypervisor architecture, is not covered in this
Magic Quadrant because we have not been able to find enough references using it. However,
Parallels' success with containers, and common management and automation tools, creates an
opportunity for expansion with Bare Metal in the service provider market.

Strengths
Unique and innovative multioperating system, container-based solution, including live
migration and increased isolation

Parallels Virtuozzo Containers is the leading product with a containers-based solution

for service providers

Reduced administrative and operating system software costs, and higher density
compared with hypervisor-based solutions

Cautions
Importance of an enterprise customer base (and "on-ramp") as hybrid cloud computing
evolves

Extends operating system kernel code, which causes the potential for software errors or
conflicts (primarily with Windows)

Dependence by many workloads on a single host operating system

Red Hat
Red Hat continues to enjoy significant market success in the Linux distribution business with a
share in the range of 58% in 2010 (see "Market Share Analysis: Operating System Software,
Worldwide, 2010"). With its large Linux installed base, Red Hat has an opportunity to gain a
foothold in the virtualization market. It's taken Red Hat more than seven years to create a
coherent hypervisor/virtualization solution. Its acquisition of Qumranet in September 2008 ² an
Israeli-based, open-source development organization for a Linux kernel-based hypervisor ² was
a tactically smart move. Until that point, the only viable alternative for an OSS hypervisor was Xen
(which Red Hat supported). However, when the Xen OSS development team was acquired by
Citrix, Red Hat chose to be proactive by acquiring Qumranet and KVM developer expertise,
rather than following in the path of Citrix (XenServer), which owned the chief developers. It has
taken Red Hat three more years to improve the robustness of KVM for enterprise production use,
and to develop a robust and functional ecosystem in which to compete.
Although KVM is getting some platform vendor endorsements (such as from IBM), the
enthusiasm and strong independent software vendor (ISV) ecosystem, so prominent in driving

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Linux to worldwide recognition and acceptance, has lagged for Linux virtualization. As a result of
the market's confusion, the slow pace of the ecosystem, superior Unix and mainframe
alternatives, and Red Hat shouldering most of the marketing burden, Linux virtualization market
share, and KVM specifically, has lagged behind VMware, with low single-digit market share.
Since Gartner Magic Quadrants are not predictors or forecast models, the aforementioned
comments on timing and penetration reflect a current position statement on Red Hat, but not a
forecast of future potential. For example, on the positive side, Red Hat is endeavoring to raise its
level of visibility in cloud computing and made an announcement with IBM on 17 May 2011 about
the Open Virtualization Alliance, which includes BMC Software, HP and Intel, among others. We
believe that the alliance is recognition that driving more participation in a Linux ecosystem
(instead of relying only on Red Hat's limited marketing resources) is mandatory to the growth of
Linux virtualization. And if Red Hat's virtualization does not succeed as the Linux OS distribution
and model has, then prospects for Linux as an important cloud building block may also lag, since
virtualization is nearly a sine qua non of cloud computing. On the other hand, the alliance is also
a very late response to the dominance of VMware and growing share of Microsoft Hyper-V.
Gartner's client contacts reveal cautious interest in Red Hat virtualization. We are still
experiencing relatively low interest levels in Red Hat Enterprise Virtualization (RHEV). While this
period could still be predominantly proofs of concepts and development/test environments, we
are more likely to encounter clients that have made commitments to VMware (or others) and are
cautious about making additional commitments that expand required toolkits and administration
skills. We also detect sensitivity on pricing. Perceptions that OSS should result in a lower total
cost of ownership (TCO) are being challenged by Red Hat's virtualization pricing model for guest
operating systems. Red Hat's pricing model tends to escalate by the number of VMs under
support. Unlimited VM support on four-socket configurations with premium 24/7 support can more
than triple a base RHEL subscription. Red Hat marketing and sales execution will be crucial in
overcoming powerful market players like VMware, Microsoft, Oracle and Citrix. The lower Red
Hat Magic Quadrant criteria scores associated with marketing and sales execution have been the
primary causes for the lack of progress from last year's Magic Quadrant.
We reiterate from last year's Magic Quadrant that, by 2012, Red Hat must show rapid uptake in
upselling its accounts to activate KVM with RHEV management features. The biggest change
from last year is that users are less ambivalent about KVM and RHEV capabilities, but are still
hanging back from strategic long-term commitments.

Strengths
Strong and loyal RHEL customer base opportunity (mostly unvirtualized)

Integrated hypervisor with Linux kernel (e.g., leveraging mature scheduling)

Performance and security

Ease of access and installability

Leadership of the core KVM OSS development community

Cautions
Limited sales and marketing execution

The majority of virtualized RHEL instances today are running on VMware

Limited ecosystem of tool vendors

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 RHEL VM guest pricing tiers are inhibitors to rapid market expansion in the company's
own user base

Limited production use of dynamic mobility

VMware
VMware continues to set the standard in the x86 server virtualization infrastructure market, but
competition has been gaining share in this rapidly growing market. vSphere 4.1 was released in
2010, and will be the last release to support the ESX "classic" hypervisor architecture (which uses
a Linux-based service console). VMware has made it clear that all future releases will require
ESXi, which reduces the footprint of the hypervisor significantly (reducing the size of the single
point of failure, and reducing planned downtime).
With regard to the desktop, VMware continues to expand and deliver on its existing offerings of
View, ThinApp and VMware Workstation. The integration of View and ThinApp has provided
customers a fairly comprehensive solution that provides clients the ability to scale HVD
deployments to projects that are larger and more complex than seen in prior iterations of the
product. VMware has also articulated its future vision of the desktop under Project Horizon, which
integrates legacy Windows PC functionality with cloud-based applications and services delivered
to broader audiences and customers.
VMware has also been expanding the vision for virtualization as a basis for a private cloud,
delivering vCloud Director in 2010. While moving up the stack, VMware faces serious competition
for new business, primarily in the midmarket, where VMware's features are less valuable, and
entry price is more important. However, VMware seems to be winning at least 60% of new
midmarket customers ² in large part due to a well-structured channel, but also due to strong
mind share developed over the past 10 years. Except for very small deployments, VMware's price
remains high, which continues to be the No. 1 concern customers have with VMware. VMware
will continue to be challenged to move up the IT stack into private and hybrid cloud computing for
its more-advanced and larger customers, while, at the same time, competing for new, mostly
smaller, customers, whose requirements are less deep.
One emerging area of success for VMware is the cloud infrastructure service provider market.
Thousands of service providers are now using vSphere, and a growing number are involved in
the vCloud initiative. These service providers are trying to balance a desire for differentiation and
low cost with access to the large VMware installed base. VMware's challenge and opportunity is
to enable a certain amount of differentiation for these providers while maintaining a standard for
interoperability with enterprise vSphere and vCloud deployments.

Strengths
Virtualization strategy and road map that lead to private and hybrid cloud computing

Technology leadership and innovation

High customer satisfaction

Large installed base (especially among large enterprises), and a large and growing
number of service providers in the vCloud initiative

Cautions
Maintaining revenue growth as its market penetration exceeds 50%, and as midmarket
growth drives prices down

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© 2011 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
 Maintaining mind share in the midmarket as competition grows (especially with
Microsoft)

Dependence on expansion into new and challenging adjacent markets (for example, IT
and service automation, application architecture)

RECOMMENDED READING
Some documents may not be available as part of your current Gartner subscription.
"Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market"
"Virtual Machines Will Slow in the Enterprise, Grow in the Cloud"
"The Road Map From Virtualization to Cloud Computing"

Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets
change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or
MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope
one year and not the next does not necessarily indicate that we have changed our opinion of that
vendor. This may be a reflection of a change in the market and, therefore, changed evaluation
criteria, or a change of focus by a vendor.

Evaluation Criteria Definitions

Ability to Execute
Product/Service: Core goods and services offered by the vendor that compete in/serve the
defined market. This includes current product/service capabilities, quality, feature sets and skills,
whether offered natively or through OEM agreements/partnerships as defined in the market
definition and detailed in the subcriteria.
Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an
assessment of the overall organization's financial health, the financial and practical success of
the business unit, and the likelihood that the individual business unit will continue investing in the
product, will continue offering the product and will advance the state of the art within the
organization's portfolio of products.
Sales Execution/Pricing: The vendor's capabilities in all pre-sales activities and the structure
that supports them. This includes deal management, pricing and negotiation, pre-sales support
and the overall effectiveness of the sales channel.
Market Responsiveness and Track Record: Ability to respond, change direction, be flexible
and achieve competitive success as opportunities develop, competitors act, customer needs
evolve and market dynamics change. This criterion also considers the vendor's history of
responsiveness.
Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver
the organization's message to influence the market, promote the brand and business, increase
awareness of the products, and establish a positive identification with the product/brand and

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organization in the minds of buyers. This "mind share" can be driven by a combination of
publicity, promotional initiatives, thought leadership, word-of-mouth and sales activities.
Customer Experience: Relationships, products and services/programs that enable clients to be
successful with the products evaluated. Specifically, this includes the ways customers receive
technical support or account support. This can also include ancillary tools, customer support
programs (and the quality thereof), availability of user groups, service-level agreements and so
on.
Operations: The ability of the organization to meet its goals and commitments. Factors include
the quality of the organizational structure, including skills, experiences, programs, systems and
other vehicles that enable the organization to operate effectively and efficiently on an ongoing
basis.
Completeness of Vision
Market Understanding: Ability of the vendor to understand buyers' wants and needs and to
translate those into products and services. Vendors that show the highest degree of vision listen
to and understand buyers' wants and needs, and can shape or enhance those with their added
vision.
Marketing Strategy: A clear, differentiated set of messages consistently communicated
throughout the organization and externalized through the website, advertising, customer
programs and positioning statements.
Sales Strategy: The strategy for selling products that uses the appropriate network of direct and
indirect sales, marketing, service and communication affiliates that extend the scope and depth of
market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy: The vendor's approach to product development and delivery that
emphasizes differentiation, functionality, methodology and feature sets as they map to current
and future requirements.
Business Model: The soundness and logic of the vendor's underlying business proposition.
Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to
meet the specific needs of individual market segments, including vertical markets.
Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or
capital for investment, consolidation, defensive or pre-emptive purposes.
Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the
specific needs of geographies outside the "home" or native geography, either directly or through
partners, channels and subsidiaries as appropriate for that geography and market.

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