Although Microsoft has been talking for quite some time about the features that are coming to Windows Server 2012 Hyper-V and Microsoft Hyper-V Server 2012, at the June 2012 TechEd in Orlando, FL, the company fully lifted the veil and showed what's coming to Hyper-V Server 2012, aka Hyper-V 3.0, in detail.
For some high level details about Hyper-V 3, take a look at this article by John Casaretto, where he summarizes the major features and provides some additional analysis. In many ways, Microsoft has caught up to VMware with Hyper-V 3, and in some other ways, the company has actually leapt beyond its primary competitor. In other ways Microsoft still falls short of VMware.
A declining VMware?
I would be surprised if VMware executives are sitting back and watching Microsoft without some level of trepidation. While Microsoft’s enterprise-grade virtualization has lagged far behind VMware, those executives know they cannot underestimate the Redmond behemoth. And VMware has developed some marketing collateral to counter some of the improvements in Hyper-V 3.
Over the past few years, VMware has also worked hard to differentiate itself beyond being “just another hypervisor” vendor. It has created a cadre of products intended to help organizations move into what VMware likes to call the “post PC era.” It has assets across a broad range of IT that it can leverage to help organizations better implement private clouds and connect to public ones.
Major risk in SMB and midmarket
That said, I believe that VMware will lose some of its hypervisor market to Microsoft in the coming years, particularly once Windows Server 2012 and Hyper-V Server 2012 reach the “SP1” milestone that many companies consider the time to implement a Microsoft product. However, at the beginning, I don’t believe that VMware will suffer a major decline in the large enterprise and high-end midmarket space.
Instead, I believe that VMware’s greatest risk is in the SMB midmarket. Although VMware has attempted to do better in this space, this has been an underserved area and often goes to VMware simply by default and because Microsoft has yet to provide a compelling story. With Hyper-V 3, the story will be there from a feature set perspective, and this will push SMBs to more carefully consider Microsoft as a viable platform for virtualization and private clouds, particularly given some of Hyper-V 3’s SMB friendly features, such as shared nothing migrations that don’t require expensive storage.
Hyper-V 3 remains unproven
In what could be an upside for VMware, Hyper-V 3, although emerging from a long beta cycle, is a new, unproven product version that contains a lot of v1.0 features from Redmond. Microsoft’s track record in v1.0 products and features is spotty—some are great and some, well, not so much. This alone could give companies pause as they realize that they need a hypervisor platform that just works. vSphere has enjoyed fantastic success and an almost fanatical following for a very long time, and the features have matured over the years, resulting in a product that does what it’s expected to do and does it very well.
If Microsoft’s features prove to be on par with VMware, this advantage will soon erode, but for now, perception is squarely in VMware’s corner.
Still no subscription
VMware has also made some missteps over the years that I see as having a potentially negative impact on it as it goes head-to-head against Microsoft. First, the company ended its VMware Technology Network (VMTN) subscription service several years ago and has yet to provide a replacement suitable for virtualization pros who wish to test and learn about the products outside a production environment. Although VMware provides 60-day trial licenses, few people want to constantly rebuild lab environments.
In contrast, Microsoft’s TechNet software subscription service is popular and flexible and provides IT pros with full access to most Microsoft titles without much in the way of real restrictions, except for using them in production.
To be certain, Microsoft is no saint when it comes to licensing, and entire volumes could be written about the maze of decisions that need to be made and tradeoffs considered when it comes to what needs to be purchased. Further, although System Center is a great bundle of products, I believe that Microsoft has made a fundamental error in bundling what were previously separate components. This bundling adds a barrier to entry, particularly for SMBs. On the plus side, a great many Hyper-V capabilities no longer require System Center Virtual Machine Manager to operate.
VMware, however, also has a less-than-stellar reputation in licensing. Many comparisons attempt to determine which product’s hypervisors are less expensive — Microsoft's or VMware's — and every pundit looks at the issue a bit differently. However, VMware also has a knack for finding what are considered “sneaky” ways of extracting additional revenue from existing customers who have been faithfully paying annual maintenance.
With the release of vSphere 4, this came in the form of a whole new SKU called “Enterprise Plus”, and in vSphere 5 it took the form of the still controversial vRAM licensing scheme. Although both vSphere 4 and vSphere 5 bundled fantastic new features, the conversation around the products rested on the licensing changes, particularly with vSphere 5.
If VMware wishes to compete against the perception of a “free” Hyper-V 3.0, the licensing frustration will need to stop, or it will simply give customers one more reason to consider a migration.
The partner ecosystem
VMware has created a whole new market, and it shows. The company’s partner ecosystem is robust and strong. Hundreds of companies are making a great living out of supporting and enhancing what VMware brings to the table with regard to virtualization.
Microsoft’s virtualization-focused partnerships aren’t yet nearly as robust, but that is changing. Partners such as Veeam and Solarwinds are adding Hyper-V support to their existing products. As Hyper-V gains traction, expect to see more partners join the fold.
And, to be frank, Microsoft already has a massive ecosystem around it as well, even if it’s not all focused on virtualization. The company has deep experience in establishing and developing partner relationships that span years and even decades.
Action Item: Although the jury is still out on just how well Microsoft will execute on Hyper-V 3 and on how interested customers will be in considering the new platform, one thing is certain: Increased competition in this market can only be good for customers in the form of better economics, better features, and better overall support.
At this juncture, I would not recommend that companies simply jump from VMware to Hyper-V 3 without a clear economic or feature justification. However, for companies that have yet to standardize on a hypervisor platform or that need to significantly expand an existing environment, careful comparative analysis and lab testing should be performed to determine which platform can best meet the needs of the organization.