Microsoft's virtualization landgrab exposes VMware vulnerability

Microsoft is taking a big chunk of VMware's market share, indicating that the door may be open for open-source vendors like Red Hat too.

VMware may still hold 78 percent of the virtualization market when measured by revenue, as reported by ComputerWorld. But Microsoft has learned a thing or two from open source and now claims a whopping 23 percent of the market based on shipments of new licenses, with VMware down to 44 percent of new licenses.

With just a few months in the market with its Hyper-V product, Microsoft's market share progress signals discontent with VMware's pricing and suggests that Microsoft may not be the only one capable of feeding at the virtualization trough.

Red Hat and Novell: time to kick your virtualization efforts into overdrive. VMware's customers await you.

Microsoft's progress has been made under the banner of low cost and choice. As noted by Microsoft, "Customers now have choice in market. VMware is no longer the dominant server virtualization vendor." It's a line stolen from the open-source script, and one that Red Hat and Novell would do well to use.

Red Hat and Novell aren't even in the top-three vendors for virtualization shipments, as IDC data indicates. Still, Red Hat has been charging hard into virtualization with its Qumranet acquisition, and both Red Hat and Novell have something that even Microsoft can't match: a free entry price for using their virtualization offerings.

The one sure thing in all this virtualization fracas is that it's a bad time to be offering virtualization as a standalone. The operating system vendors are going to win this battle because they can bury the cost of virtualization in larger offerings.

VMware came into the stock market with a bang last year, but it may go out with a whimper.

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