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Gartner: Worldwide Virtualization Software Revenue Will Increase 43% in 2009

February 12, 2009 by Robin Wauters 2 Comments

Worldwide virtualization software revenue will increase 43 per cent from $1.9 billion in 2008 to $2.7 billion in 2009, according to Gartner. Global virtualization penetration is on pace to reach 20 per cent in 2009 from 12 per cent in 2008. Its adoption within the IT organization is driven by the need to reduce the total cost of ownership (TCO), enhance the agility and speed of deployment of IT needs and minimize carbon footprint.

Gartner’s definition of the virtualisation market includes server virtualization management, server virtualization infrastructure and hosted virtual desktops (HVDs). Gartner estimates that revenue from HVDs will more than triple from $74.1 million to $298.6 million in 2009 while revenue from server virtualization management software will increase 42 per cent from $913.9 million in 2008 to $1.3 billion in 2009. Revenue from server virtualization infrastructure will grow 22.5 per cent from $917 million in 2008 to $1.1 billion in 2009.

“Virtualization helps organizations to cut costs, better utilize assets and reduce implementation and management time and complexity, all of which are crucial in this economic environment,” said Alan Dayley, research director at Gartner. “Server virtualization management will be the primary source of growth in the virtualization market as hypervisor software functionality – key to virtualizing a server – rapidly moves to hardware. Server virtualization management technology in particular is designed to reduce TCO, reduce associated availability risk, and improve quality of service. In addition, building more manageability into infrastructure components provides technology suppliers with an additional source of revenue and a basis for competitive differentiation.”

“Although HVD is an emerging technology that currently represents 11 per cent of the virtualization software revenue market, it will account for a growing proportion of corporate users through 2013. Virtual desktop infrastructure feeds additional server virtualization needs because the users’ desktop data will now need to be managed in a virtualized server environment. Maturity and acceptance will result in a significant broadening of the addressable user population by 2010 and an acceleration in deployments. Gartner advises end-user organizations to define and optimize management processes for HVDs as they did for traditional PCs. Although HVD images are centralized and more standardized, the capabilities for managing them across their full deployment life cycles remain incomplete. To remedy this, they should budget for additional point-solution management capabilities.

“End-user organizations must build cost and benefit financial models to fully understand the financial impact of implementing HVDs, and make certain that cost and benefit exist as compared with those for traditional PCs,” said Phil Dawson, research vice president at Gartner. “There is a growing number of management providers, which represents an opportunity for end-user pricing leverage, but no vendor offers a complete set of server virtualization management functionality. IT organizations will have to undertake – or outsource – their own virtualization management system integration efforts or wait for better-integrated and robust toolsets.”

“From a vendor perspective, by 2013, Microsoft will challenge VMware as the dominant vendor in the server virtualization infrastructure market and will do very well in small and midsize businesses (SMBs). The server virtualization management market is currently wide open, with more than 100 vendors supplying products that meet some of the requirements in the management stack. As the management market matures, virtualization infrastructure vendors, the “Big Four” (BMC Software, CA, HP and IBM/Tivoli) and other management vendors will build and acquire more virtualization management capabilities, thus consolidating the market. On the other hand, the HVD vendor landscape is crowded, confusing, and full of opportunists.

Gartner recommends that vendors take advantage during this disruptive period by introducing leading-edge management tools in support of virtualization initiatives and ensure that virtualization-specific management products can integrate within existing management frameworks. Mr Dayley said: “The fast-growing server virtualization management and HVD markets are less consolidated, with scores of vendors trying to stake claim in the market.”

Filed Under: Featured Tagged With: gartner, prediction, research, revenue, study, virtualisation, virtualization, worldwide virtualization

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