Sacha’s Weblog

The virtualization market is entering phase II: RHT acquires Qumranet September 4, 2008

Today RHT made an aggressive move into the virtualization market.

Let me explain what it means.

One of the key strengths of OS vendors is the size of the their ecosystem. The more IHV (Independent Hardware Vendors) and ISV (Independent Software Vendors) certify on your OS, the more chances you have to be successful. Or to put it differently, with no or little ecosystem (read: VMWare), a company has very little chance of success. And on the OS market, the landscape has become pretty simple: MSFT and RHT are kings next to a handful of dying Unix flavors. And this is not likely to change anytime soon: for an IHV or ISV to support a new OS requires considerable engineering investment. Lesson 1: The OS game is over. MSFT and RHT will fight the market share, while “would-be” new entrants will watch the game.

Recently, the market has been aggressively shifting towards virtualized environments and in order to provide a cost-efficient solution to those users, you cannot simply “reset the OS ecosystem” and restart from scratch: you must leverage the existing OS ecosystem. Lesson 2: The two leading OS vendors are the only able to sustain on the virtualized market in the long run. This is exactly what KVM provides (and XEN does not): KVM can fully leverage the existing IHV and ISV ecosystem earned over time by RHT.

For sure, in the short run (i.e. before the virtualization market gets under pricing pressure) companies like VMWare will be able to sell a virtualized environment as a (very costly) side dish to the OS, but in the long run, core OS and hypervisors will just be one. As an example, if you are paying for RHEL Enterprise today, let’s say for 32 CPUs, this gives you the right not only two run the core RHEL OS on 32 CPUs, but also gives you access to:
- unlimited virtualized environments running on top of these 32 physical CPUs (this is what VMWare will sell you)
- unlimited virtual RHEL guests running on top of those 32 physical CPUs

Lesson 3: price pressure will slowly get rid of the virtualization-only vendors (36 months).

Morale of the story: the virtualization market is entering into Phase II, when only OS vendors could sustain the pressure required to remain in the virtualization market.

Onward,

Sacha