While most may not see Microsoft as a ‘disruptive innovator’ anymore, they seem to be claiming exactly that role in the enterprise hypervisor space, just as they did in gaming with the Xbox. As noted in "VMware, the bell tolls for thee, and Microsoft is ringing it", Hyper-V appears to be becoming a legitimate competitor to VMware's dominant ESXi product. As described in the article, people reportedly now widely believe that "Microsoft functionality is now ‘good enough'" in the hypervisor - and it's clearly cheaper (in license terms, at least.) So is this change in perception really turning into more enterprises choosing Hyper-V?
From LogicMonitor's view of the situation, we can say that in our customer base, virtualization platforms have been almost entirely VMware in the enterprise and most private cloud providers, with some Xen and Xenserver in the cloud provider space. But, we have also been seeing more Hyper-V deployments being monitored in the last 6 months. Still a lot less in absolute numbers than the number of ESXi infrastructures being added to LogicMonitor: but the rate of growth in Hyper-V is certainly higher.
This sounds like a “low-end disruption” classic case study from the Innovator’s Dilemma (Clayton M. Christensen), except for the fact that the Innovator is a $250 billion company!
Right now, Microsoft seems to offer the 'good enough' feature set and enterprise features, and 'good enough' support, reliability and credibility, leading to some adoption in the enterprise datacenter. (From our biased point of view - the metrics exposed by VMware's ESXi for monitoring are much better than those exposed by Hyper-V. But perhaps Hyper-V is 'good enough' here, too...) There are lots of ways this could play out - VMware has already dropped the vRam pricing; Microsoft being cheaper in license terms may not make it cheaper in total cost of ownership in the enterprise; VMware is starting to push VMware Go, which could turn into a significant disruptor itself.
So can the $250 billion Microsoft really prove to be more nimble than the $37 billion VMware? History would suggest Microsoft will deliver a solid product (eventually). Hypervisors themselves are becoming commodities. So the high dollar value will shift upward to management. VMware may chase the upward value (like the integrated steel mills did, that were largely disrupted out of existence); they may go after the commodity space (reducing their profit margins, but possibly protecting their revenue). Or they may push VMware Go, Cloud Foundry, and other cloud offerings, disrupting things entirely in another direction.
Of course, there are many other possibilities that could play the role of disruptor in the enterprise hypervisor space: Citrix (Xenserver) and KVM spring to mind, but these (currently) tend to play better in the large data center cloud space, rather than the enterprise.
Still, VMware is very much in a position of strength and is well suited to lead the next round of innovation which I see as the release of a product which allows for the movement of VM's seamlessly from my own infrastructure to a cloud provider's and back, while maintaining control, security and performance (and monitoring) that IT is accustomed to. Let's see if I am right. Fun times ahead!
- This article was contributed by Steve Francis, founder and Chief Product Officer at LogicMonitor