Virtualization Awareness Reaches 92% Among Large Enterprises, 83% Among SMBs

Tags:  shared hosting  virtualization  Virtuozzo  VMware 

Between May and August 2006, Forrester Research surveyed 1,770 companies on their adoption of virtualization technologies. 40% of the respondents said they've virtualized production servers (up from 29% in 2005). 11% are in evals. More impressively, as InfoWorld reports:

"Awareness of virtualization by Global 2000 large enterprises grew to 92% in 2006 from 87% in 2005. Awareness by medium-to-large businesses jumped to 86% from 60% and to 83% from 62% by SMBs."

And which virtualization vendors are these companies familiar with? VMWare (53%). I was surprised that only one respondent mentioned Xen, but the upcoming Xen-integrated RHEL5 might change that. 6 mentioned Solaris Containers, which Joyent offers. SWSoft's Virtuozzo was notably absent from the list; I think its focus on web hosting providers as a distribution channel might be at least partially to blame.

Within the web hosting industry, the predominant virtualization use case has been VPS hosting, where the goal is to put multiple customers on a physical server. Customers typically choose between pre-packaged service plans with fix resource allocations; they have no control over VPS density, and no ability to create additional virtual environments with excess capacity.

But out in the enterprise IT world, people find virtualization appealing because it gives them beyond the box access to computing resources. Imagine the difference between opening a 2-liter soda bottle every time you're thirsty, versus being able to pour any amount of its content into a glass.

Unfortunately, this architecture isn't all that compatible with the web hosting business model. Dedicated hosting providers want customers to deploy as many servers as possible, instead of piling multiple operating systems and software applications onto the same machine until it reaches full utilization. Aside from the obvious objective of maximizing revenue by increasing customer server count, there are also logistical considerations such as software license and IP address management. And shared hosting providers are heavily dependent on overselling capacity.

The question, can web hosting providers hold on to the "soda only comes in 2 liter bottles (which, in our hands, can be stretch out to a couple dozen 1 liter servings)" paradigm forever when prospective customers have near-total awareness of more flexible alternatives?

One of the Web hosting industry's longest-standing citizens, Isabel Wang is also a high-tech enthusiast. Through her WHIR blog, she examines the impact emerging Web technologies will have on the Web hosting business, and on the motivations of hosting consumers. Isabel has been in the web hosting ... (Read full bio)

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Comment by Anonymous on Thursday, February 15, 2007

Isabel,

VMWare's appeal over SWSoft has as much to do with the products as their focus. SWSoft utilizing OS-level virtualization, as opposed to VMWare HyperVisor virtualization. This is huge difference in terms of security and many enterprises are not entirely happy about the idea of OS-level virtual machines running on, say, a Windows server. VMWare wins because it has serious technical strengths, combined with wonderful enterprise support and a rich product line. Virtuozo and Parallels (which SWSoft finally admitted to owning) aren't even integrated at this point - something you can't say about VMWare Server, Player, ESX, etc.

Comment by Anonymous on Thursday, February 15, 2007

Hey Dan,

We're making different kinds of comparisons. You're thinking of how Virtuozzo's technology/support stacks up against VMWare's. I'm wondering how it would have fared relative to its current performance if SWSoft hadn't invested so heavily in the hosting market.

Let's forget about alternatives and focus on Virtuozzo's functionality. It clearly does support virtualization in the enterprise IT sense; SWSoft has enterprise customers who've deployed it as such. But similar use cases are rare within the web hosting space. As a point of reference, hosting providers aren't using VMWare for customer-controlled virtualization either. They're not choosing between different vendors; they're steering clear of an unfamiliar business model.

I remember a 2004 or 2005 conversation with Serguei. Customers don't need whole entire servers for each app, he said. You should sell them virtualized complex hosting. My response was, I'm getting more sales inquiries than I can handle. Why shouldn't I keep offering what I've already got provisioning systems and support staff for? I'm sure this continues to be the prevailing sentiment among hosting providers.

But customer expectations are changing. Yesterday I spoke to someone who wants not just virtualization, but burstable, on-demand computing capacity. He has a Windows app, which rules out 3tera and EC2 as options. He was NOT happy that his unit of deployment had to be whole entire servers.

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