As virtualization becomes increasingly common in small and midsize businesses, VMware must contend with increased competition from both software and hardware companies. That's tough news for the company that developed the virtualization market but good news for smaller businesses, which will have more choices of virtualization products
Fresh from its hyperbolic growth, VMware added a new moniker. Rather than simply being a virtualization technique, the software now has morphed into an application development platform, one that recently gained support from 20 security suppliers.
VMware, the product and the corporation, has been hot. Company revenue has been on a steep incline: the vendor generated about $704 million in fiscal 2006 and $1.326 billion in 2007. Its software has become popular because it boosts the efficiency of server computers by letting one machine perform the work of many. Even though virtualization software has roots that date back to 1960s mainframes, the term has become synonymous with VMware. Once a niche technology, virtualization usage is becoming common in small and midsize businesses, which use it to reduce their server costs.
New Markets for VMware
To keep its revenue rising and satisfy Wall Street, the company needed to branch out into new markets. Increasingly, vendors are transforming their products from standalone solutions into application development environments. This is an area where Microsoft has excelled. Consequently, other suppliers have been following suit, for instance, network equipment vendors Cisco Systems and Juniper Networks recently opened their application programming interfaces, so third parties could deliver value added applications on top of their devices.
At the end of February, VMware followed that course and unveiled a new security technology called VMsafe. The technology integrates into the VMware's hypervisor. Third parties can then use VMsafe APIs to integrate their security products on top of the VMware software and prevent malware, such as viruses, Trojan horses, and keyloggers, from attacking virtual machines. Twenty security vendors, including Check Point Software Technologies, IBM, McAfee, and RSA, have pledged to deliver products that will enhance the security available with virtual machines.
Virtualization Becoming More Attractive to Hackers
Security has been a festering issue with virtualization. To date, hackers have been more interested in other platforms, such as Microsoft Windows and e-mail, that offer them more bang for the buck, the ability to affect more machines for the time needed to develop their malware. With virtualization becoming more common, it might become more attractive to them. If digital wrongdoers turn to virtualization as a way to perform their nefarious acts, there's a good chance they wouldn't get caught. In a nonvirtualized system, every action performed on a computer leaves a trace that can be picked up by computer forensics professionals. That may not be the case with virtualized systems. By using a combination of public access terminals and virtualization, hackers could log on, perform their evil deeds, log out, and every trace of that virtual session would be erased. In theory, VMsafe will help to prevent that possibility.
As it moves into this new area, VMware faces challenges. The most significant one comes from other vendors with alternative virtualization techniques. To date, VMware has had the market mainly to itself but that is changing. Startup Virtual Iron has been gaining momentum. Citrix has been promoting the Xen virtualization technique, one based on an open source licensing model. Traditionally, this technique hasn't been as functional as VMware, lagging in areas such as live migration, support for Storage Area Networks, and backup APIs. Citrix has a history of being able to address limitations, and many of its products fit nicely with the needs of small and medium-sized businesses.
In addition to traditional competitors, new threats are emerging. Hardware vendors are showing more interest in virtualization. These features are now showing up in server operating systems, with products, such as SWsoft's Virtuozzo, Sun Microsystems' Solaris Containers, and IBM's WPARs for AIX.
And, Of Course, There's Microsoft
Microsoft also is moving into the market. In January, it acquired startup Calista Technologies, which had focused on improving the user experience for virtualized desktops. Microsoft is using this to make a broad foray into this area: concentrating on not only server virtualization, but also application virtualization with Microsoft SoftGrid Application Virtualization; presentation virtualization, with Microsoft Windows Server Terminal Services; and desktop virtualization, using Microsoft Virtual PC and Windows Vista Enterprise Centralized Desktop.
VMware has had a nice run and played a key role in developing the virtualization market. The company's recent move into the security area makes sense and should help it expand beyond its traditional niche. How well it will fare as large, established vendors move more squarely into the virtualization market isn't as clear. Overall, small and midsize businesses will benefit because there will be more choices of virtualization products.
Does your company use virtualization products now? What have your experiences been like? How well or not so well does the technology fit with the needs of small and midsize businesses?
Read other columns by Paul Korzeniowski
Paul Korzeniowski is a Sudbury, Mass.-based freelance writer who has been writing about networking issues for two decades. His work has appeared in Business 2.0, Entrepreneur, Investor's Business Daily, Newsweek, and InformationWeek.
