Server virtualization trends: Is there still room to grow?

Server virtualization has numerous benefits, such as increased scalability and speed while producing cost savings. Performance increases from virtualization help to automate more operations, meaning that you have to work less for the same or greater benefits.

With low initial investments and continuously low operating costs, less downtime, and greater productivity, it seems silly to say that the server virtualization trend could be slowing down. Yet, technology research firm Gartner released a report on server virtualization trends last year that showed that the market has officially been declared mature.

Unfortunately, it seems that virtualization admins don’t have the job security they had at the beginning of the virtualization craze. Now, the move to cloud computing disrupts many of the operations that these admins perform.

Although server virtualization is still an incredibly popular infrastructure platform, the way that virtualized servers are deployed and used is likely to change more in the near future. In fact, Gartner analysts predict that new computing styles and approaches, such as OS container-based virtualization and cloud computing, are likely to significantly increase for this market.

There is a very high level of saturation: Over 75 percent of organizations utilize server virtualization. Some firms even report that they have virtualized or plan to virtualize 90 percent of their servers.

Indeed, 2016 virtualization revenues increased to $5.6 billion, up 5.7 percent from the previous year. With these numbers, how could anyone claim that the server virtualization trend is slowing down?

server virtualization trends

License revenue declines

Well, 2016 was the first year that license revenue actually declined and VMware reported that its new license revenue declined in the first quarter of 2016 by 1 percent. While this certainly isn’t a large drop, it shows a change happening in the virtualization market.

One reason that this license revenue growth has slowed, Gartner says, is because of the “explosion” of virtualization vendors in China, leaving Microsoft and VMware less opportunity to take those corporations that are new to the market.

Now, it seems that the virtualization market only has room left to grow via maintenance revenues instead of licensing.

Additionally, the size of the organization matters more than it has in the past. Large companies with a bigger budget for IT didn’t change how much they utilized server virtualization; it is still very widely adopted. However, “this market segment is approaching saturation,” Gartner says, leaving virtualization without much room to grow.

Instead, smaller IT budgets within organizations mean less server virtualization usage. These smaller-budgeted companies are expected to see a further decline in usage this year.

Essentially, the corporations with a large budget heavily utilize virtualization and have already brought the market to almost full saturation, whereas the smaller companies are not expected to adopt this service if they haven’t already, and those that do use it might switch to other methods.

This, according to Gartner, “is causing an overall decline in new spending for on-premises server virtualization.”

Another reason virtualization is slowing, according to Michael Warrilow, research director at Gartner, is because many users are switching from virtualization to containerization, although VMware envisions a future in which multiple containers are run inside of a virtual machine to assist in protection and management.

As virtualization was created and popularized, it went through two main phases of consolidation and abstraction. First, with consolidation, underutilized hardware was made more efficient. If you were a virtualization admin, you would reclaim resources that were allocated to servers, but ended up unused.

Then, more advanced functions came along, such as high availability and fault tolerance, which addressed the issues of multiple virtual machines existing on one piece of hardware. After this, many software companies introduced higher levels of automation to simplifying deploying virtual servers. The question is: What comes next?

The analysts at Gartner believe that “the impact of new computing styles and approaches will be increasingly significant for this market. This includes OS container-based virtualization and cloud computing.”

Essentially, what every company wants is to cut costs and increase productivity and quality. In fact, “even once-conservative technology adopters, such as financial institutions, are jumping on board” with virtualization to accomplish these goals.

On this note, many organizations are looking at running only containers because many more containers can be run on one host than virtual machines, allowing data center operators to avoid the added overhead of VMs.

Cloud makes a dent in server virtualization trends

Server virtualization trends
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With the move that virtualization is taking, cloud computing and automation are greatly increasing. Unfortunately, this includes the possibility that virtualization administrative jobs might also become greatly, or even fully, automated.

If we look at virtual machine orchestration, it has changed largely since the beginning of virtualization because of automation. In the beginning, it was necessary to have an administrator deploy the VM from a template. Now, however, this is almost fully automated.

With containers becoming more popular, there’s actually a trend moving away from virtualization taking place. In fact, Gartner says that “more than 20 percent of these organizations [who are moving away from virtualization] expect to have less than one-third of their x86 server OSs virtualized by 2017 — twice the amount reported for 2015.”

This trend is predominantly only happening within smaller corporations that appreciate that multiple containers can be run on only one host operating system. However, it’s likely that most enterprise legacy systems are going to stick with virtual machines for quite a while, even if they also shift toward the public cloud.

The case for virtualization

One particularly telling aspect that proves the virtualization market will likely stay, even if virtualization admins might not, is the fact that configuration, deployment, and performance monitoring can all easily be performed on one management console.

This accomplishes the increased productivity and simplification that many large organizations search for in regards to IT.

Like everything in technology, though, virtualization is changing. As Warrilow explains, “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.”

Although server virtualization trends point to a slowdown in certain areas, it is still a particularly strong market. It is consistently becoming more automated and simple. Although smaller organizations might simply use containers without a VM, many larger ones are expected to combine the approach for security purposes.

As virtualization continues, it is expected to offer more automation and cooperation with cloud computing to stay competitive in an ever-changing environment.

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