According to the International Data Corporation (IDC
) Worldwide Quarterly Server Virtualization Tracker
, 18.2% of all new servers shipped in the fourth quarter of 2009 (4Q09) were virtualized, an increase from 15.2% in 4Q08. New server shipments virtualized in 4Q09 increased year over year for the first time in 2009 to 352,533 units, as customers came out of the economic downturn with a "virtualize first" mentality. Yet, new server shipments virtualized for the total of 2009 declined 5% from 2008. Virtualized server end user spending declined 2% year over year in 4Q09 and 14% for all of 2009 to $15.2 billion.
Worldwide virtualization software revenue for all CPU types declined 10% year over year in 4Q09 to $447 million, thanks primarily to economic pressures and an increasingly competitive marketplace. Virtualization licenses increased 13% year over year and 21% sequentially in the quarter but declined 7% for all of 2009.
"The recovery in server spending is being led by x86 systems where virtualization continues to remain a top priority," said Matt Eastwood, group vice president of Enterprise Platforms at IDC. "IDC sees virtualization as a critical evolutionary step in the journey to the private cloud. Customers are quickly moving beyond the core hypervisor and focusing on mobility, self-provisioning, and metering & chargeback capabilities. As a result, IDC believes that automation tools increasingly represent the battleground in determining the winners and losers in a marketplace which is rapidly reshaping itself."
Server Virtualization Maturity Signals Changing Behaviors and Buying Intentions
"Over the last year we have seen widespread adoption of virtualization in both mature and emerging regions," said Michelle Bailey, research vice president of Datacenter Trends at IDC. "The recession affected datacenters across all geographies and consequently many organizations leveraged the consolidation benefits of virtual machine technology to lower short-term capital costs. Looking ahead, the most successful vendors in the virtualization market will be those that can automate the management of an ever-escalating installed base of virtual machines as well as provide a platform for long-term innovation that enables customers to continuously make improvements to their operations. Virtual server sprawl is already a reality for many IT organizations and we expect that 2010 will be a tipping point in the adoption of new management tools and IT policies."
Overall New Server Shipments Virtualized Market Standings, by Vendor
Hewlett-Packard held onto its number 1 spot for worldwide new server shipments virtualized with 38% market share for the quarter, increasing 26% year over year in 4Q09. Dell's market share declined to 26% from 29% last quarter despite a solid 17% year-over-year increase in 4Q09. IBM remained in the third position with 16% market share in 4Q09 on very strong growth of 37% year over year.
For 2009, Hewlett-Packard maintained 38% market share, while declining 2% from 2008. Dell's market share decreased 1% to 28% in 2009 and IBM was third with 15% market share. IBM was the only vendor with positive growth in 2009, increasing 1%.
x86 Virtualization License Market Standings, by Virtualization Platform
VMware ESX continues to be the number 1 virtualization platform with total licenses increasing 19% year over year in 4Q09. VMware Server continues to be the number 2 virtualization platform despite declining 9% year over year. Microsoft Hyper-V continued its ascent, capturing the third highest market share by growing 215% year over year, albeit off a small base. Meanwhile, Virtual Server 2005, with the fourth largest share, continued its depreciation with year-over-year licenses declining 29%. Citrix XenServer also showed impressive year-over-year growth of 290% and rounded out the top 5, coming off its third quarter of offering the product for free with certain management functionality. XenServer's sequential growth was a relatively modest 25%.
"2009 was a rough year for all vendors in IT, but the fourth quarter showed that end users are still hungry for virtualization software," said Brett Waldman, senior research analyst for Software Appliances and Virtualization at IDC. "Virtualization is no longer the cool, unproven technology that people are looking into for quick cost savings. It has matured into an integral piece of the IT infrastructure as companies move towards virtualization 3.0 and cloud computing."
IDC's Server Virtualization Taxonomy
Virtualization license is a unit count that represents customer usage of a virtualization platform in terms of instances deployed into production. For example, production usage of one installation of VMware ESX would be considered one virtualization license. New server shipments virtualized maps the amount of virtualization platform shipments that are sold directly by the hardware vendors. Virtualized server end user spending represents the hardware revenue of new server shipments virtualized. Virtualization software revenue represents the software revenue associated with virtualization platform sales.
IDC's Worldwide Quarterly Server Virtualization Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly virtualization license shipments, new server shipments virtualized, virtualized server revenue and virtualization software revenue, segmented by region, cpu type, vendor, form factor, sockets, virtualization platform, and primary guest operating system.