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VMware grows 20% per quarter; Microsoft tries to tap into growth with new licenses

Virtualization is so hot its leading vendor is growing at 86% per year; Microsoft volume licenses might make virtualization more practical on Windows.

Server virtualization is such a hot technology, EMC Corp. subsidiary VMware revenues are growing more than 85% per year, including two consecutive quarters of 20% growth.

VMware owns more than half the markets, dwarfing more recent competitor Microsoft.

Microsoft owns just 9% of the overall market, but it recently released a license for unlimited virtualization for Windows Server 2003 Datacenter Edition, intriguing some potential customers and VARs.

Datacenter Edition was only available through OEMs, but often for only a narrowly defined set of hardware configurations. The new license makes it available from both Microsoft and resellers under the Volume Licensing agreement.

Volume licensing makes tracking licenses easier, but costs are still too high for some users, and some servers are too small. Two-CPU servers, for example, may be too small to benefit from the Datacenter Edition, though Enterprise Edition could fill a similar role, according to a product manager for IBM's x-Series servers.

But VMware's version of virtualization is so popular it's re-energizing older virtualization approaches from IBM, Hewlett-Packard Co. and Sun Microsystems, Inc.

The end result for end users is an approach to what vendors have been calling utility computing. The result for the channel is a huge market for VARs that can match up the technological complexity of virtual servers with the cost savings and business benefit they have the potential to deliver.

The original version of this story appeared on

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