The Pervasive Data Center

Server virtualization means something fairly specific. Storage virtualization is a bit more diffuse. But it's I/O virtualization that really covers a lot of ground.

At a high level, virtualization means turning physical resources into logical ones. It's a layer of abstraction. In this sense, it's something that the IT industry has been doing for essentially forever. For example, when you write a file to disk, you're taking advantage of many software and hardware abstractions such as the operating system's file system and logical block addressing in the disk controller. Collectively, each of these virtualization levels simplify how what's above interacts with what's below.

I/O virtualization brings these principles to the edge of the network. Its general goal is to eliminate the inflexible physical association between specific network interface controllers (NICs) and host bus adapters (HBAs) and specific servers. As a practical matter in a modern data center, this usually comes down to virtualizing Gigabit Ethernet (and 10 GbE to come) and Fibre Channel links.

Virtualizing these resources brings some nice benefits. Physical resources can be carved up and allocated to servers based on what they need to run a particular workload. This becomes especially important when the servers themselves are virtualized. I/O virtualization can also decouple network and storage administration from server administration--tasks that are often performed by different people. For example, IP addresses and World Wide Names (a unique identifier for storage targets) can be pre-allocated to a pool of servers.

That's I/O virtualization conceptually. Vendors are approaching from a lot of different directions.

For starters, like many things, I/O virtualization has its roots in the mainframe. From virtual networking within servers to channelized I/O without, many aspects of I/O virtualization first appeared in what is now IBM's System z from whence it made its way into other forms of "Big Iron" from IBM and others. Thus, many servers today have various forms of virtual networking within the box whereby virtual machines communicate with each other using internal high-performance connections that appear as network links to software.

However, I/O virtualization in the distributed systems sense first arrived in blade server designs. Egenera was the pioneer here. HP's Virtual Connect for its c-Class BladeSystem and IBM Open Fabric for its BladeCenter are more recent and more widely sold examples. And virtualization, including I/O virtualization, lies at the heart of Cisco's Unified Computing System (UCS).

Blade architectures incorporate third-party switches and other products to various degrees. However, they're largely an integrated technology stack from a single vendor. Indeed, this integration has arguably come to be seen as one of the virtues of blades. In this sense, they can be thought of as a distributed system analog to large-scale SMP.

A new crop of products in a similar vein aren't tied to a single vendor's servers.

Aprius, Virtensys, and NextIO are each taking slightly different angles, but all are essentially bringing PCI Express out of the server to an external chassis where the NICs and HBAs then reside. These cards can then be sliced up in software and divvied up among the connected servers. Xsigo is another company taking a comparable approach but using InfiniBand-based technology rather than PCIe.

Whatever the technology specifics, the basic idea is to create a virtualized pool of I/O resources that can be allocated (and moved around) based on what an individual server requires to run a given workload most efficiently.

There's a final interesting twist to I/O virtualization. And that's access to storage over a network connection. While network-attached file servers are suitable for many tasks, heavy-duty production applications often need the typically higher performance provided by so-called block-mode access. For more than a decade, this has tended to translate into storage subsystems consisting of disk arrays connected to servers by a dedicated Fibre Channel-based storage area network (SAN).

However, with the advent of 10 GbE networks and associated enhancements to Ethernet protocols, we're starting to see interest in the idea of a "unified fabric"--a single infrastructure to handle both networking and storage traffic. One of the key technology components here is a protocol called Fibre Channel over Ethernet (FCoE) that allows block-mode storage access originally intended for Fibre Channel networks to traverse 10 GbE instead.

There's more to unified fabrics than that involving alternate protocols such as iSCSI and various acceleration technologies but for our purposes here, I'll use FCoE as a blanket term.

So what does FCoE have to do with I/O virtualization? After all, an adapter card optimized for FCoE can be virtualized alongside other NICs and HBAs. So, at first glance, you might think that FCoE and I/O virtualization were simply complementary.

At one level, you'd be right. Aprius, for example, advertises that it provides "virtualized and shared access to data and storage network resources (Ethernet, CEE, iSCSI, FCoE, network accelerators) across an entire rack of servers, utilizing the ubiquitous PCI Express (PCIe) bus found in every server."

However, considered more broadly, I/O virtualization and FCoE solve many of the same problems--that of connecting servers to different types of networks without a lot of cards and cables associated with each individual server.

Adapters that connect to converged networks will themselves converge to card designs that can handle a wide range of both networking and storage traffic. Furthermore, if Ethernet's history is any indication, prices are likely to drop significantly over time; this would make finely allocating networking resources among servers less critical.

To the degree that each server can get a relatively inexpensive adapter that can handle multiple tasks, the rationale of bringing PCIe out to an external I/O pool is, at the least, much reduced. There are still rationales for virtualizing I/O in some form--especially in an integrated environment such as blades. Cisco, for example, puts both FCoE and virtualization front-and-center with its Unified Computing System. But narrow justifications for I/O virtualization such as reducing the number of I/O cards required are significantly weakened by FCoE.

At the end, FCoE may not be I/O virtualization as such but it's closely related in function if not in form.

It used to be that system management products were for the care and feeding of individual servers. They could deal with many of them, sure, and might even have had tools aimed at automating repetitive operations. But, fundamentally, they mostly looked at systems in isolation.

Enterprise management tools, on the other hand, looked at the IT infrastructure big picture. Sophisticated and complex, tools like CA's Unicenter, HP's OpenView, and IBM's Tivoli were the aggregation point for alerts and reports about the health of an organization's IT. But they rarely actually did anything; they watched for problems but it was other software or system administrators that had to actually swing into action.

The bottoms-up orientation of system management tended to win out over time. Enterprise management was never displaced--exactly. But it did long seem as if many of the products in the enterprise management space sat far from where the interesting action was in the data center.

However, today, we're seeing a shift to system management that happens at the level of the data center as a whole or at least a virtualized pool of systems and applications. Virtualization is one of the drivers here. Another is "private clouds" or, if you prefer, a more dynamic and services-oriented view of IT resources.

As a result, system management products are starting to take on more and more of the roles that were traditionally associated with enterprise management. We're also seeing systems management meet enterprise management in the middle, so to speak. IBM's VMControl announcement on October 20 is a case in point.

As IBM puts it in their release: "VMControl allows combinations of physical and virtual IBM servers to be managed as a single entity. This approach--known as system pooling--expands the benefits of virtualization by helping corporate data centers simplify complex management functions and better share and prioritize use of critical resources such as processing power, memory and storage."

The new product, IBM Systems Director VMControl Enterprise Edition, is focused on virtualized environments. It supports IBM's PowerVM and z/VM as well as x86 virtualization technologies such as VMWare, Hyper-V and open x86 virtualization solutions. IBM plans to first offer it on IBM Power Systems running AIX in December, 2009 with other platforms coming next year.

VMControl Enterprise Edition works in concert with Tivoli; IBM also announced "a new version of Tivoli Provisioning Manager that provides enhanced automation of the manual tasks of provisioning and configuring servers, operating systems, middleware, software applications, storage and network devices." As I've discussed previously, Tivoli is very much a central part of how IBM views cloud computing and therefore how it thinks about the evolution of the enterprise data center.

PowerVM itself, as its full name implies, is part of IBM's Systems Director family. This is IBM's systems management portfolio; rough counterparts are HP Systems Insight Manager, Dell OpenManage, and Sun xVM Ops Center. Systems Director has been the recipient of considerable development and marketing attention in recent years that have greatly improved its integration across IBM's disparate product lines as well as its overall functionality.

Virtualization is no longer just about server consolidation. It does that, sure, and thereby reduces the number of physical servers that an organization needs to purchase. But, especially in enterprises, it's increasingly as much about resource pools and services (such as disaster recovery) enabled by virtualization as it is about consolidation. And that makes the need for management more rather than less.

NEW YORK--It was a larger and cheerier crowd that attended this year's Red Hat's analyst day at the New York Stock Exchange on Tuesday.

That shouldn't be surprising. At last year's meeting on October 7, Red Hat management had the dubious honor of ringing the closing bell on a day that saw the Dow Jones Industrial Average drop over 500 points.

This meeting took place in a time of what's probably best described as cautious optimism about the state of the economy. And in the context of Red Hat financial results that have continued to show growth at a time when so many companies in IT industry and elsewhere have not.

For the quarter ending August 31, its profit jumped 37 percent relative to the year-ago quarter, besting analyst estimates.

The day included a fair bit of discussion related to financial minutiae, as you'd expect for an event pitched primarily for financial analysts. However, it also included an overview of Red Hat's strategy and its technical direction. Here are a few things that caught my eye.

Jim Whitehurst, Red Hat's CEO, spent a fair bit of time talking about what boils down to fine-tuning of its go-to-market execution such as:

• Value of subscription. This includes what he called "education and compliance," essentially a euphemism for getting people using Red Hat Enterprise Linux (RHEL) without paying for it to purchase a subscription. It also encompasses improving renewal rates for those cases where RHEL has been preloaded by a system builder and bringing a greater focus to articulating the value of RHEL relative to free substitutes such as CentOS.
• Routes to market. This refers to a continued build-out of the channel so that system integrators and others who recommend and install systems for less sophisticated customers will specify Red Hat as part of their solution. This stands in contrast to how, historically, Red Hat was mostly pulled into accounts by technically-savvy users and IT departments.

The message I took away from this is that Whitehurst isn't looking to change Red Hat's direction in any major way but sees a fair number of areas where more focused execution could lead to financial improvements. Later in the day, we also heard that Red Hat is taking a more systematic approach to which products it allocates development dollars for work such as internationalization.

For his part, Paul Cormier, executive vice president of products and technologies, reiterated Red Hat's belief that virtualization (which should be taken as hypervisor in this context) belongs in the operating system. This argument has been in evidence for a while as my fellow analyst Stephen O'Grady discussed after last year's event. 

It stands in stark contrast to VMware's desire to make the operating system irrelevant. Or, to put it another way, VMware's ambition to make the VMware ESX and ESXi hypervisors the model for a new type of operating system. This is too fraught a debate to tackle here; I largely agree with Stephen's take in his post.

However, one of the interesting outcomes of this battle is that Red Hat has been cozying up to Microsoft, the other big gun on the "hypervisors belong in the OS" side. This includes Red Hat's announcement Wednesday "that customers can now deploy fully supported virtualization environments that combine Microsoft Windows Server and Red Hat Enterprise Linux."

This sort of interoperability is certainly a customer desire and both Red Hat and Microsoft can legitimately present it in those terms without anyone smirking. However, the enemy of my enemy is also my friend, at least up to a point.

I also took note that Red Hat finally seems to be making some progress on the management front.

The product in question is RHEV Manager (RHEV-M); it's covered in detail in this video from the Red Hat Summit in September and is currently being tested by customers.

One reason I think it's important is that Red Hat apparently, if belatedly, recognizes that it is. CTO Brian Stevens admitted that RHEV-M "has been a huge missing ingredient."

The one customer speaker at the analyst day was Dave Costakos of Qualcomm and he focused on his company's experiences with testing RHEL-based virtualization and the associated RHEV Manager which he describes as "hits the mark."

I caught up with Dave at a break to get a bit more detail. He told me that they wanted a Web-based interface, which RHEV Manager has. He also liked the integration with Active Directory and other directory systems, and the role-based access controls. He said that it could perform the provisioning operations that Qualcomm requires and otherwise meets their needs.

Management has historically been a relatively weak part of Red Hat's offering that was mostly focused on updating packages. This is really a reflection of the broader Linux and open-source ecosystem in general. Projects like Nagios and, more recently, GroundWork notwithstanding, management doesn't play well to the strengths of open source. It touches too many parts of an IT infrastructure and requires too much cooperative work with the vendors making the things that need to be managed.

It's reasonable to ask whether Red Hat is too late to win big with RHEV Manager and its associated KVM-based virtualization play. But it had to attack management from some angle unless it was prepared to just cede that area of differentiation and potential point of control to system makers and others.

Finally, no technology discussion today would be complete without at least a mention of cloud computing. Brian Stevens jokingly called it a "shiny thing that people are looking at how to monetize."

The cloud discussion covered several angles, not least of which was standardization efforts such as Deltacloud. Like most other standardization efforts, this focuses on what is often called Infrastructure-as-a-Service; Amazon EC2 and S3 are perhaps the best known examples. Stevens admitted that it's going to be much harder to define a standard set of higher-level services (platform as a service in the vein of Microsoft Azure) that are portable.

Red Hat's distinctive play in the infrastructure cloud essentially circles back to its approach to virtualization. In cloud infrastructure as imagined by Red Hat, the operating system matters in important ways.

That's because applications matter; indeed, applications are ultimately what matter most. And in on-premise computing, one of Red Hat's greatest values and differentiators is the vast number of certified applications that it runs. This certification matters to users because, if they encounter a problem, it means that they can call the application vendor to get support. Otherwise, they'd get a "sorry, that's not a supported configuration."

One can argue whether the software layering of which the historical operating system is a part is the most appropriate choice for cloud computing. Fellow CNET blogger James Urquhart dives deeply into this topic in a pair of recent posts.

However, whether it's the way it should be or not, it is for now. And for Red Hat to be able to enable users to carry the certification of applications into a cloud model is a significant differentiation.

I visited my dad in Maine over the weekend and, as is often the case, part of the weekend was devoted to "IT administration," aka attending to PCs and associated gadgetry.

While some of the time involved transferring photos among various devices, a decent chunk was devoted to working on a PC whose operating system had decided to irretrievably corrupt itself somehow, requiring a fresh rebuild. And, yes, it was Windows--Windows XP to be precise--but please don't try to tell me that this sort of thing never happens with your favorite OS of choice.

This story isn't about Windows; it's about the inherent complexity of PCs of all stripes with locally installed and administered software. And this, to basically look at photos, play solitaire, and read e-mail through a browser.

The frustrating thing to me is that we basically know how to deal with this problem. It just isn't implemented in anything approaching a widespread way. It's also an approach that various people have been bringing up off and on for years. Take this article by Rupert Goodwins from ZDNet in 2004.

This solution is delivering a hosted desktop over broadband to a client device offered as part of an ISP's service. In other words, for some additional monthly fee, you'd rent a thin client from Comcast or Verizon just as you can rent a DVR today. They'd give you a standard desktop image along with a profile that could be personalized (including your desktop background) and space for your user data. They'd back up the whole thing and would be able to restore to the standard desktop image in the event of problems.

The thin client doesn't even need to be a desktop. Mobile thin clients are also readily available. It would have no local storage--that is, no local hard disk to crash.

There are various wrinkles that service providers would need to work out--such as dealing with additional applications that users might want to install and drivers for locally attached USB devices such as printers.

But we, as an industry, know how to do this. Desktone is one company that offers what it calls Desktops-as-a-Service. Essentially, it sells software that enables enterprises and service providers to build a hosted desktop infrastructure.

Service providers can then resell these hosted desktops to others. For example, in April Desktone announced a deal with ICC Global hosting around offering cloud-based virtual hosted desktops based on the Desktone Virtual-D Platform to organizations in the academic, public sector, and mid-tier business markets.

So hosted desktops, which you can think of as a cloud-computing-oriented implementation of virtual desktop infrastructure (VDI) are real. They just haven't made it out to consumers in anything approaching a widespread way.

Such a service wouldn't be for everyone--or even most. Many are more than willing to trade off the sometimes frustrating complexities of a full-fledged PC for the flexibility it brings. (Although I do wonder if it wouldn't be interesting for a supplemental device intended primarily for browsing even in a house with one or more PCs.)

But it does seem to me as if the cable and telecommunications companies have fallen down when it comes to offering what could be a very useful service for many. And, not incidentally, one they could charge an additional fee for--something that they're never shy about doing.

VMworld, which took place last week in San Francisco, was hopping.

In fact, the number of attendees appeared to overwhelm many of the conference's educational labs in the early going. And the many vendors I spoke with at the event were happy about their booth traffic and the show in general. Now that I've had a bit of time to digest and distill three days of whirlwind activity, five points stick with me:

1. We're seeing virtualization--as technology, products, and solution sets--start to mature in many respects. Or at least the current phase of it. Fellow analyst Judith Hurwitz described how she "was left with the feeling that we are in between generations of technology at this year's VMworld."

For me, this conclusion comes out of the observation that there was relatively little on display related specifically to server virtualization that was fundamentally new and different. That's not to suggest a lack of vendor activity. Anything but. However, the activity largely took the form of new iterations and building out on existing templates.

2. Legitimate cloud computing was much in evidence. But, my, the cloud washing was fierce. Many, many companies offering management and other products relating to virtualized infrastructure were eager to present themselves as playing in the nebulously defined "private cloud" space.

VMware itself was as guilty as anyone. With the latest version of its virtual infrastructure product, now dubbed vSphere, already launched back in April, VMware's focus at the show tilted heavily toward cloud computing.

While there were a few specifics, such as vCloud Express, much of this took the form of forward-looking generalities. For example, VMware gave a lot of airtime to the notion of hybrid clouds that bridge private and public networks even though this is largely an architectural theory at this point.

3. So was anything both new and real? Yes. A couple things. One was I/O virtualization, which can be thought of conceptually as separating computing from I/O (network and storage connections mostly) and allowing that I/O to be shared and dynamically allocated. It's not really a new concept. Like many things, it has its roots in the mainframe and has, more recently, found a home in blade designs from the likes of Cisco Systems, Hewlett-Packard, and IBM.

However, the current crop of products are intended to work with standard rackmount or blade servers. Xsigo uses InfiniBand-based technology. Virtensys, Aprius, and NextIO essentially just bring PCI Express out of the server. This is a relatively young technology area but one worth watching.

4. Client-side virtualization was also a hot area even with Citrix and Microsoft--in many respects the top dogs in this space--in semi-exile from the show.

It's an exciting and evolving landscape with many new approaches and products. This includes work on protocols to improve the user experience over network connections of different types; Wyse, once exclusively a thin client purveyor, is now heavily focused here. We're also seeing a general trend toward making more effective use of the processor and graphics resources on the client rather than making the server and network do all the work; Wanova is a start-up that made an announcement shortly before the show in this area.

5. My last takeaway is a sort of meta point. The way that we do computing is changing in rather significant ways and virtualization--together with its related but distinct cousin, cloud computing--is at the focus of that change.

This is fundamentally a change in how we operate computer systems rather than, say, how we write software for them. However, because it ultimately affects how applications get delivered and computing is accessed, it has far broader implications than for just data center operators.

VMware's financial results from the second quarter of 2009 are out. They beat revenue and income estimates but those estimates were far less euphoric than during VMware's spectacular growth days of a few years back. Second-quarter revenue was $456 million, flat from the second quarter of 2008. Operating income on a GAAP basis was down 38 percent from the year-ago quarter and down 14 percent non-GAAP.

International revenue saw about 3 percent growth but this was counterbalanced by a similar decline in the U.S. International revenue is now almost equal to those in the U.S.--$222 million compared to $234 million.

One notable facet of the earnings release is that the shift to services revenue--including both software maintenance and professional services--continued at a rather rapid pace. The company is best-known for its virtualization products that relate to server infrastructure. Services revenue was up 32 percent from the year-ago quarter while licenses were down for the same period. We saw a similar trend last quarter as well.

In fact, VMware's services revenue now equals the revenue that it gets from software licenses. To some degree this reflects more software maintenance dollars coming from a bigger installed base. However, in general, software companies like to see revenue coming disproportionately from licenses because the cost of selling an additional license is relatively small.

VMware's financial statements back this up. The cost of license revenue was about $23 million last quarter; the cost of services revenue was $54 million. A heavy shift toward services is not where VMware wants to go long term.

Oracle announced on Wednesday an agreement to acquire Virtual Iron.

The tech giant describes Virtual Iron as a "leading provider of server virtualization management software." In this context, however, "leading" should be read: on the roster but something like fourth-string backup quarterback.

Oracle's statement in advance of a conference call:

The combination of Virtual Iron technology and Oracle VM's scalable, high performance and highly available server virtualization product is expected to provide more comprehensive and dynamic resource management across the full software stack. Customers are expected to benefit from rapid application deployment, streamlined virtualization server configuration and improved visibility and control across Oracle's enterprise software stack. In addition, we anticipate that the combination of Virtual Iron technology with Oracle Enterprise Manager will enable customers to be more agile in meeting application service levels for virtual environments.

The concept that Oracle is looking to beef up its in-house virtualization assets is not especially surprising. What is less expected is that Oracle would make this acquisition on the heels of its purchase of Sun Microsystems--which has considerable in-house virtualization assets of its own. (Here's an in-depth report on it that I wrote last year; registration required.)

The presentation that Oracle sent with the announcement focuses on what Virtual Iron brings in terms of "dynamic virtual data center management." Specifically, Oracle states that Virtual Iron adds dynamic resource management and automation, including capacity management, power management, and the ability to integrate with other software through an open, comprehensive, and scriptable API.

To be sure, both Sun's and Lowell Mass.-based Virtual Iron's virtualization portfolios are based on the open-source Xen project, so they're at least potentially complementary. However, these capabilities would seem to overlap Sun's xVM Ops Center to at least a certain degree.

Oracle hasn't so far discussed Virtual Iron's role with respect to channel strategy. Sun, like Oracle itself, offers products that have very much an enterprise flavor. Virtual Iron, by contrast, has in recent years primarily focused on the midmarket--smaller companies that didn't necessarily have the best fit with the sophistication (and complications) of products from the likes of VMware. So there seems at least the potential here for Oracle to expand its reach down-market--perhaps in conjunction with parts of Sun's open-source stack such as MySQL.

Financial details of the transaction were not disclosed, suggesting that this was, unsurprisingly, a relatively cheap buy for Oracle.

LAS VEGAS--The Day One keynotes at Citrix Synergy 2009 were about users and desktops. Today was nominally about data centers and clouds--of which there were a variety of announcements. However, Citrix's XenClient ("Project Independence") loomed large as well.

Of the products discussed on stage, XenClient is perhaps furthest from being a fully realized product. But is also offers an intriguing window into how the PC as we know it is likely to fundamentally change over the coming years.

XenClient is a "Type 1" native hypervisor that sits on a PC and hosts one or more guest operating systems. This approach contrasts with the "Type 2" hosted hypervisors that are far more common on PCs today.

There are good reasons why we tend to see native hypervisors on servers and hosted hypervisors on desktops. Native hypervisors are higher performance, especially when it comes to interacting with networks and disks. As a result, it wasn't until native hypervisors like VMware ESX Server and Xen came to market that x86 virtualization started to seriously move beyond useful but relatively narrow uses such as in test and development labs.

The downside of native hypervisors is that, because they sit directly on top of a system's hardware, they have to take over a variety of the functions that an operating system usually performs. For example, a native hypervisor has to deal with things like power management and needs to know how to talk to graphics cards and chips, network and storage adapters, and other system hardware.

(Depending upon the virtualization architecture in question, some device interactions can be passed through to the guest operating systems, but the point remains that a native hypervisor is exposed to hardware details and idiosyncrasies that are masked if the hypervisor is hosted on an operating system.)

The great diversity of client hardware relative to server hardware therefore makes running native hypervisors on a PC tricky business.

It's also been the case that vendors haven't exactly pushed client-side virtualization--in contrast to using application virtualization to deliver software to clients--in a broad way. Hosted virtualization products handle specific use cases such as security (VMware ACE), running Windows applications on Macs (Parallels Desktop for Mac, VMware Fusion), and software development (VirtualBox, VMware Workstation). Start-ups are also tackling the security angle with alternative approaches. RingCube uses containers. Neocleus uses a Xen-based native hypervisor.

But no large vendor has seriously pushed a broad-based Type 1 hypervisor for the client. Microsoft, for its part, has been publicly skeptical about the idea. (Not especially surprising given that Microsoft has only reluctantly embraced virtualization--in part because native virtualization takes over some of the traditional tasks of the operating system.)

That changes with XenClient, a project that Citrix has collaborated on closely with Intel.

Here's how Citrix describes XenClient and its vision for desktop computing:

XenClient is a strategic product initiative with partners like Intel, focused on local virtual desktops. We are working together to deliver on our combined vision for the future of desktop computing.

This new virtualization solution will extend the benefits of hosted desktop virtualization to millions of mobile workers with the introduction of a new client-side bare metal hypervisor that runs directly on each end user's laptop or PC. This together with an innovative back-end desktop management solution for creating, delivering, and updating corporate desktop computing environments will transform the way corporate desktops are delivered and managed, giving IT all the security, simplicity and cost savings of centralized management, with an unprecedented level of performance, personalization and freedom for end users.

To net it out, Citrix is pushing for a future in which a hypervisor is a standard abstraction layer for every cleint and server--just the way that x86 architectures of all stripes are architected and built. Think of it as a BIOS on steroids if you will.

Citrix's interest here is obvious. After all, its strategy is to make money from managing virtualized environments. Thus, continuing with a theme from Synergy's first day, XenClient--like XenServer--will be free when made available later this year.

Intel's interest here is that XenClient is specifically targeted for systems with vPro technology. vPro includes:

• Intel Virtualization Technology (VT)--hardware assists for improved virtualization performance
• Intel Trusted Execution Technology (TXT)--formerly called LaGrande, provides hardware-based rooted security
• Intel Active Management Technology (AMT)--hardware management technology

Intel's Pat Gelsinger said in his keynote that vPro is ramping quickly--he claimed it was in 60 percent of the Fortune 100--but Intel is doubtless actively seeking more reasons to get businesses to upgrade to their latest and greatest client platforms.

The vision here seems a sound one. After all, IT vendors have essentially been adding layers of abstraction to mask complexity since the beginning. Even an operating system is an example of abstraction (actually many of them rolled into one software package). And use cases involving personal PCs used to access corporate networks or protected VMs that run security scanners seem far less esoteric than they did even just a couple of years back.

The question is more one of time frame. When do compelling uses get made available by software vendors in largely transparent ways for end users who are not developers or otherwise ready, willing, and able to explicitly manipulate multiple virtual machines on a single client? It isn't this year but there's a lot of reason to believe that this is the direction the client is headed.

VMware's first-quarter financial results are out.

Revenue increased 7 percent from the first quarter of 2008 to $470 million. GAAP net income for the first quarter was $69.9 million, or 18 cents per diluted share, compared to $43.1 million, or 11 cents per diluted share, for the first quarter of 2008.

These are respectable results, though "analysts, on average, were expecting a profit of 20 cents per share on sales of $474.4 million, according to a poll by Thomson Reuters." Furthermore, guidance was disappointing, Reuters noted:

VMware, majority-owned by EMC, estimated second-quarter revenue to be flat or down from $456 million in the year-ago period. That was below analysts' average forecast for revenue of $501 million, according to Reuters Estimates.

Difficult economic climate or not, this is still a sharp change from VMware's growth rates of a few years back (though to be sure, it's a much larger company now, making it hard to maintain that sort of rate). And some financial analysts are getting grumpy, Reuters reports:

"It's a serious miss. It is not just the magnitude that is troubling. It is the reason they are giving," said Global Equities Research analyst Trip Chowdhry. "There is something fundamentally wrong--either in product strategy or sales execution."

This seems overstated, from my perspective, as a watcher of virtualization, as well as related technologies and companies. VMware, it seems to me, has done a great job--first under founder Diane Greene and now under Paul Maritz--in keeping VMware solidly in front of the virtualization wave and adding value on top of base components that have commoditized to a certain degree. And it's just rolled out an impressive new set of products, vSphere 4--its new Virtual Infrastructure suite.

(Commoditization isn't really the right word for what has happened to the hypervisors that form much of the foundation for server virtualization; however, it's certainly become hard to charge much money for them.)

That said, and top-line and bottom-line results aside, there were some underlying details that caught my eye. That's these, according to VMware's release:

First-quarter services revenues were $213.3 million, a 48 percent increase from last year. VMware's business mix continues to shift, with services revenues becoming a larger proportion of total revenues.

In the first quarter, services revenues were 45 percent of total revenues, compared to 33 percent a year ago. Driven by the challenging macroeconomic environment, license revenues were $257.0 million, a decline of 13 percent from a year ago.

That's a striking shift toward services from product. Contrast this to another large independent software vendor, Oracle, which garnered only 22 percent of its revenue from services in its last fiscal quarter--a figure that is actually slightly down from the year-ago period. In my experience, Oracle's mix is fairly typical of product companies.

This bothers me a bit for a couple of reasons. First, services require a lot of dedicated headcount. They also don't scale especially well--you're essentially renting out people. Contrast this to products; once you cut the CD, you can make as many copies as you want. (Obviously, there are limits to sales channels and so forth, but software licenses are much more scalable.)

The other is that it points to one of the impediments to virtualization growth; it's relatively complex--at least once you get past the consolidate-one-or-two-servers phase. To be sure, some of that services revenue is education (about 10 percent), which is reasonable enough in a technology area that's still young. But a full 80 percent is consulting--which says to me that this virtualization stuff isn't as easy as it should be.