Skip to main content

Why Server Virtualization Reached Market Saturation

Every enterprise IT best practice eventually reaches obsolescence as new methods disrupt the legacy status-quo -- virtualization has reached that turning point. The worldwide x86 server virtualization market is expected to reach $5.6 billion in 2016 -- that's an increase of 5.7 percent from 2015, but demand has shifted, according to the latest worldwide market study by Gartner.

Despite the overall market increase, new software licenses have declined for the first time since the virtualization market became mainstream more than a decade ago. Growth is now being driven by software maintenance revenue, which indicates a rapidly maturing market segment.

"The market has matured rapidly over the last few years, with many organizations having server virtualization rates that exceed 75 percent, illustrating the high level of penetration," said Michael Warrilow, research director at Gartner.

Virtualization Market Development Challenges

The server virtualization market is still dominated by VMware. However, Microsoft has worked its way in as a mainstream contender for enterprise use. There are also several small niche vendors including Citrix, Oracle and Red Hat, in addition to an explosion of local vendors in the domestic China market.

While server virtualization remains the most common infrastructure platform for x86 server OS workloads in on-premises data centers, Gartner analysts believe that the impact of new approaches to server optimization will be increasingly significant. This includes OS container-based virtualization and open source hybrid cloud computing.

According to the Gartner assessment, usage of server virtualization among organizations with larger IT budgets remained stable during 2015. It continues to be an important and heavily used legacy technology for these businesses, but this market segment has apparently reached saturation.

In contrast, organizations with smaller IT budgets expect a further decline in usage through to at least 2017. This is causing an overall decline in new spending for on-premises server virtualization.

New Options Disrupt the Virtualization Market

Gartner believes that organizations are increasing their usage of "physicalization" -- choosing to run servers without virtualization software. More than 20 percent of these organizations expect to have less than one-third of their x86 server OSs virtualized by 2017, and that's twice the amount reported for 2015.

Why the shift in demand? The rise of software-defined infrastructure (SDI) and hyperconverged integrated systems (HCIS) are providing new options. Gartner believes that it has put pressure on virtualization vendors to add more out-of-the-box functionality and provide a better ROI.

"What was considered as the best approach to greater infrastructure agility only a few years ago, is becoming challenged by an array of newer infrastructure choices," said Mr. Warrilow.

Popular posts from this blog

How Savvy Pioneers Lead the Future of Work

Hybrid and fully remote work are inevitable in the Global Networked Economy where high-performance talent demands flexibility from employers. To enable these progressive work models, organizations are investing in a wide range of technologies to support more agile types of employment.  According to the latest worldwide market study by International Data Corporation (IDC), leading organizations will spend nearly $1 billion on the Future of Work (FoW) in 2023 -- that's an increase of 18.8 percent over 2022. Future of Work Market Development "Work models continue to evolve, but 37 percent of decision-makers in a recent global survey note that Remote and Hybrid work models will be an embedded part of accepted work practices, supported by a continued shift to the cloud, increasingly instrumented and interconnected physical workplaces, and intelligent digital workspaces," said Holly Muscolino, group vice president at IDC . According to the IDC assessment, organizations must mak

Human Resource Transformation Enabled by IT

Many senior executives are taking a proactive approach to digital business transformation in order to achieve their strategic goals. Delivering revenue growth and profitability is now imperative for every function, including Human Resources (HR). The top 3 priority HR technologies this year are skills management, learning experience platforms, and internal talent marketplaces, according to the latest worldwide market study by Gartner. "With a tumultuous global economy, HR technology leaders face a balancing act in 2023," said Sam Grinter, director at Gartner . "Leaders must anticipate greater levels of accountability and demand for measurable outcomes to justify new technology investments." HR Transformation Market Development Forty-four percent of HR leaders report driving better business outcomes is their number one strategic priority for HR technology transformation over the next three years. Growth in headcount and skills (26 percent) and cost optimization (17 p

Global EV Charging Revenue to Exceed $300B

During 2022, fuel prices increased very quickly, partly due to a number of macroeconomic reasons. In fact, the effects of the global COVID-19 pandemic are still impacting fuel prices, with many oil refineries having reduced capacity due to a prior fall in demand. Those significant events and other trends have created a demand for a growing variety of Electric Vehicles (EVs). While EVs have existed for decades, they really became a viable option for more consumers during the past five years. However, although EVs are suitable for some buyer needs, their usability is constrained by the current availability of battery charging infrastructure. EV Charging Market Development According to the latest worldwide market study by Juniper Research, revenue from electric vehicle charging will exceed $300 billion globally by 2027 -- that's up from $66 billion in 2023. Regardless, the Juniper analysis found that fragmentation in battery charging networks is restricting further EV adoption in some