Friday, 13 May 2016 13:10

Server virtualisation market peaking towards US$5.6 billion in revenues: Gartner

Server virtualisation market peaking towards US$5.6 billion in revenues: Gartner Image courtesy of ddpavumba,

The worldwide x86 server virtualisation market is expected to reach $5.6 billion this year – an increase of 5.7% over 2015 – but despite the increase Gartner says new software licenses have declined for the first time since the market became mainstream more than a decade ago.

According to Gartner, growth is now being driven by maintenance revenue, which it says indicates a rapidly maturing software market segment.

Michael Warrilow, research director at Gartner, said: "The market has matured rapidly over the last few years, with many organisations having server virtualisation rates that exceed 75%, illustrating the high level of penetration," Michael Warrilow, research director at Gartner, said.

Warrilow says the market remains dominated by VMware, however, Microsoft has worked its way in as a mainstream contender for enterprise use, and there are also several niche players including Citrix, Oracle and Red Hat, in addition to an explosion of vendors in the domestic China market.

While server virtualisation remains the most common infrastructure platform for x86 server OS workloads in on-premises data centres, Gartner analysts believe that the impact of new computing styles and approaches will be increasingly significant for the market, which includes OS container-based virtualisation and cloud computing.

Gartner says the trends are varying by organisation size more than ever before. According to the analyst firm, usage of server virtualisation among organisations with larger IT budgets remained stable during 2014 and 2015. “It continues to be an important and heavily used technology for these businesses, but this market segment is approaching saturation. In contrast, organisations with smaller IT budgets expect a further decline in usage through to at least 2017. This is causing an overall decline in new spending for on-premises server virtualisation,” Gartner notes.

And, according to Gartner, organisations are increasing their usage of ‘physicalisation’, choosing to run servers without virtualisation software – with more than 20% of these organisations expecting to have less than one-third of their x86 server OSs virtualised by 2017, twice the amount reported for 2015. “However, the underlying rationales remain varied.”

Gartner also says the rise of software-defined infrastructure (SDI) and hyperconverged integrated systems (HCIS) are providing new options, which has put pressure on best-of-breed virtualisation vendors to add more out-of-the-box functionality and provide a better experience and faster time-to-value.

"What was considered as the best approach to greater infrastructure agility only a few years ago is becoming challenged by an array of newer infrastructure choices," Warrilow said.

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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