Virtualisation license mkt up 53pc in Q2

FRAMINGHAM, MASS, USA: According to IDC's Worldwide Quarterly Server Virtualization Tracker, worldwide virtualisation license shipments in the second quarter of 2008 (2Q08) increased 53 percent year-over-year, compared to a 72 percent year-over-year increase the previous quarter.

The x86 server market led the way with 60 percent year-over-year growth followed by the EPIC server market with 18 percent growth. Worldwide CISC and RISC server virtualisation licenses declined 15 percent and 7 percent year-over-year, respectively.

Brett Waldman, research analyst for System Software at IDC, said: "Quarterly totals of x86 server virtualisation licenses continue to experience healthy growth, although the growth rates have slowed over the last four quarters. The modest decline in growth rates indicates that the market is showing early signs of maturation. Based on our conversations with end users, IDC believes that the high-volume consolidation opportunities – the low hanging fruit in the x86 server virtualisation market – is starting to dry up. This is, in turn, resulting in smaller deals overall."

"The virtualisation platform providers are going to have to adapt their go-to-market strategies to this ever-changing dynamic, as new growth opportunities open up around new deployment of virtualised servers not specifically targeted at consolidation, and at new customer segments such as midsized companies," Waldman added.

Worldwide new server shipments virtualised increased 52 percent year-over-year in the second quarter, compared to 70 percent growth in 1Q08.

Worldwide virtualisation software revenue grew 15 percent year-over-year in 2Q08, compared to 32 percent growth in the first quarter of 2008. The growth in virtualisation software revenue primarily came from the x86 server market, which grew 39 percent year over year. EPIC virtualisation software revenue also increased year-over-year, albeit at a slower pace of 9 percent.

Overall new server shipments virtualised market standings, by vendor

Hewlett-Packard held onto its number 1 spot for worldwide new server shipments virtualised with 34 percent market share and 52 percent year-over-year growth. This growth was driven by a solid performance in sales of Intel-based processors.

Dell solidified its position as the number 2 vendor with its market share growing from 25 percent in 1Q08 to 29 percent in the second quarter, powered by 110 percent year-over-year growth.

Dell’s strong performance was driven by solid growth of Intel-based processors and a very strong performance from AMD-based sales. IBM remained in the third position with 16 percent market share. IBM achieved 32 percent year-over-year growth driven by a solid performance from its Power Systems servers. This was the first quarter in the last year in which IBM saw positive growth in its new RISC-based server shipments virtualised.

x86 virtualisation license market standings, by virtualisation platform

VMware grew its x86 server virtualization software business 27% year over year and maintained the number 1 position in the market with 78 percent revenue share in 2Q08. When looking at new x86 virtualization licenses, VMware continues to hold on to its strong position in the x86 market with a combined market share of VMware ESX and VMware Server at 44 percent. However, in its first quarter of general availability Microsoft Hyper-V delivered a strong showing, and when combined with Virtual Server 2005, Microsoft’s market share is 23 percent of new shipments.