VMware: Not just hypervisor revenue

More than 80 percent of VMware income comes from higher-level tools, a move that gives the EMC subsidiary more breathing room against rivals. Getting real about virtualization

SAN FRANCISCO--In the old days, VMware made its money selling core virtualization software called a hypervisor that lets a computer run several operating systems simultaneously. Now it's moved beyond that.

"Over 80 percent of our revenue comes from outside of our hypervisor today," VMware President Diane Greene said in a press meeting at the company's VMworld show here Tuesday. "We've done a very effective job of building products that unlock the value of virtualization for our users."

That's significant, given the competitive realities that face the company. The open-source Xen hypervisor today is available for free, and Microsoft plans to build a hypervisor code-named Viridian into its future Windows Server.

VMware initially sold core virtualization technology for desktops, then servers, but later added its Virtual Infrastructure software to manage virtual machines and other higher-level software. That software lets administrators handle tasks such as starting and stopping virtual machines, moving them from one physical machine to another through a feature called VMotion, backing them up and restarting them elsewhere in the event of a data center disaster, and monitoring resource use to make sure servers aren't either overtaxed or idle.

Diane Greene
Credit: CNET
VMware President Diane
Greene speaks at VMworld.

Virtualization has been around for decades, but its inclusion in mainstream computers with x86 chips is bringing it out of the shadows and attracting financial attention. VMware, an EMC subsidiary, had a roaring initial public offering in August, and Citrix Systems bought XenSource for $500 million.

VMware's management software doesn't currently manage other hypervisors. "Our hypervisor has so much more functionality, it wouldn't make sense," Greene said. For example, 60 percent of the company's customers use VMotion, and that feature is only just arriving in product and has been removed from Microsoft's first version of Viridian.

But Greene held the door open for closer ties. "We're starting to show signs of partnering with Microsoft," Greene said. She pointed in particular to the Open Virtualization Machine Format (OVF) effort, in which VMware, Microsoft and XenSource created a common format for storing virtual machines onto hard drives.

At VMworld, VMware announced a plan to embed its new ESX Server 3i hypervisor in servers from IBM, Dell, Hewlett-Packard, NEC and Fujitsu. That brings the possibility of new sales of support software and management tools, Greene said.

Greene also offered a 10-year forecast, predicting that virtualization will become not merely accepted, as it is today in some circles, but omnipresent. "We do think virtualization will be ubiquitous on the hardware; and in automated data centers for someone running 3 servers to 3,000 servers, virtualization will just be a given," she said.

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