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VMware partners covet competitive products, desktop virtualization sales

VMware resellers are considering competitors' server virtualization products, even as they praise the workstation version of VMware's virtualization technology.

VMware Corp. was the sponsor and undoubtedly the main focus of the VMworld 2007 conference last week, but VMware partners were discussing a lot more options than just VMware server virtualization products.

They were talking about last week's announcement by Microsoft that Viridian -- the code name for Microsoft's Systems Center Virtual Machine Manager hypervisor -- will be included with Windows Server 2008 when it ships early next year.

They were talking about Citrix Corp.'s acquisition of XenSource last month, and the potential that combination has in the arsenal of server virtualization products VMWare partners will sell.

They talked about how none of these possibilities would threaten VMware server virtualization market share any time soon.

But they welcomed alternatives.

More on server virtualization
Microsoft looks to increase server virtualization market share

Virtualization, multi-core will cut server sales, force changes on channel

"You can't be a one-trick pony," said Britton Almy, senior consultant in the enterprise systems and storage group with Lewis Center, Ohio-based Sarcom Inc. "You need to understand what's out there and what's driving the market."

"Our company is always looking at alternatives, and I actually think it's a good thing with a number of these other vendors coming on, because it's going to get more competitive and that potentially could drive down the costs of virtualization," Almy observed.

Even VMware executives said they will work with the competition on certain accounts.

"We still work with Citrix; they are going to compete in certain markets, but we've also said whatever they do, if it's a VMware customer and they prefer some Citrix technologies to be deployed together, we are going to continue to work with them," said Brian Byun, VMware's vice president of global partners and solutions.

Still, at this point in the evolution of the whole market, Almy said VMware server virtualization products have no match.

That has translated into a windfall of profits for channel partners, who accounted for 75% of VMware's revenue last year.

Sales estimates at Nexus Information Systems, for example, predict a 150% growth rate in VMware server virtualization product sales in 2007 compared to last year, according to Keith Norbie, director of the storage division. That does not mean, however, that Norbie isn't looking at other options.

"It's my job to investigate other products and make sure as a fair witness for a client that I know what products are available," Norbie said. "At this point Microsoft is so far off the pace that even when Viridian comes out, it still won't have what VMware's got."

"But you can't underestimate their political power," Norbie added. "It just depends on whether the product is good and if it's capable."

Microsoft has not yet offered a compelling solution for virtualizing desktops as well as servers, Norbie said. VMware already offers a workstation version of its server virtualization technology.

"I don't know if Microsoft is ready to play in that game," Norbie said.

"We've seen several multi-million-dollar deals in the past year, as well as several hundred-thousand-dollar deals," said Jerry Chen, VMware's senior director of enterprise desktop. "We've seen momentum actually increase a lot over the last four quarters."

Almy said his company is expanding its VMware server virtualization business by moving into the desktop virtualization market and is dedicating resources to developing that line of business.

"Desktop virtualization is going to do the same thing for the desktops that ESX is doing for servers, because you can move to thin-client computing, and hardware that does not have any moving parts in it tends to last a lot longer," Almy said.

"We are developing some demonstrations in our lab for thin-client computing, whether it's CCI through blades with HP, VDI or Citrix. You don't typically target one solution as better than the other, because it is a solution-based technology and every client has a unique environment," Almy said.

Almy said he sees desktop virtualization increasing Sarcom's VMware products line of business, which has grown more than 20% from 2006 to 2007. Currently the company's typical engagements for virtualization projects are between 20 and 40 servers, but the company has worked on jobs with as many as 2,000 servers.

According to Almy, resellers have to bear in mind that the key to selling a VMware server virtualization system is in the design, not the cost.

"Everything is tied to the solutions. We have very few customers that come to us and just want to buy the software. They want us to design the environment for them [and] tell them what their potential total cost of ownership and return on investment is going to be," Almy said.

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