Worldwide virtualisation software revenue will increase 43% from $1,9-billion in 2008 to $2,7-billion in 2009.
According to Gartner, global virtualisation penetration is on pace to reach 20% in 2009 from 12% in 2008. Its adoption within the IT organisation is driven by the need to reduce the total cost of ownership (TCO), enhance the agility and speed of deployment of IT needs and minimise carbon footprint.
Gartner's definition of the virtualisation market includes server virtualisation management, server virtualisation 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 virtualisation management software will increase 42% from $913,9-million in 2008 to $1,3-billion in 2009. Revenue from server virtualisation infrastructure will grow 22,5% from $917-million in 2008 to $1,1-billion in 2009.
"Virtualisation helps organisations to cut costs, better utilise assets and reduce implementation and management time and complexity, all of which are crucial in this economic environment," says Alan Dayley, research director at Gartner. "Server virtualisation management will be the primary source of growth in the virtualisation market as hypervisor software functionality key to virtualising a server – rapidly moves to hardware.
"Server virtualisation 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% of the virtualisation software revenue market, it will account for a growing proportion of corporate users through 2013.
Virtual desktop infrastructure feeds additional server virtualisation needs because the users' desktop data will now need to be managed in a virtualised 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 organisations to define and optimise management processes for HVDs as they did for traditional PCs. Although HVD images are centralised and
more standardised, 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 organisations 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," says 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 virtualisation management functionality.
"IT organisations will have to undertake – or outsource – their own virtualisation 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 virtualisation infrastructure market and will do very well in small and midsize businesses (SMBs). The server virtualisation 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, virtualisation infrastructure vendors, the "Big Four" (BMC Software, CA, HP and IBM/Tivoli) and other management vendors will build and acquire more virtualisation 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 virtualisation initiatives and ensure that virtualisation-specific management products can integrate within existing management frameworks.
Dayley says: "The fast-growing server virtualisation management and HVD markets are less consolidated, with scores of vendors trying to stake claim in the market."