Microsoft is the most successful software company of all time, with revenues of $72 billion and net profits of $23 billion in 2011. In the business area it has been active in adding virtualisation and services to its packaged software business and today its Hyper-V server hypervisor is of vital importance to users.
We’ve noticed some interesting ecosystem issues when talking to storage hypervisor and disaster recovery software suppliers. In particular:
- VMware vCenter, Microsoft System Center, CitrixServer and Red Hat RHEV each have their own APIs which have to be addressed in turn by their software development teams, with significant investment needed for each
- Storage hypervisors are then typically added as plugins to these virtualisation management environments, making them in a way subservient to each ecosystem
- In the case of Microsoft, server and client virtualisation are differentiated offerings and businesses and have to be addressed separately
Microsoft’s is facing a major challenge in balancing its traditional (physical) with new virtualisation business, but has failed to make inroads on VMware’s server hypervisor market share over the last year. It also has strong competition from the rapid growth of Red Hat and KVM. Despite this we see no threat of ‘cannibalisation’ of old by new offerings – Microsoft can make good business from virtualisation software, systems management and (especially) services.
Users and software developers have to deal with different parts of Microsoft for its various virtualisation offerings, which increase their investment and limits Microsoft’s success.
There are strong potential advantages for Microsoft to merge its various virtualisation offerings under a single umbrella – not just in increasing software and systems management sales, but also in competing with Apple – the fastest growing vendor in the enterprise market, but very backward in its approach to client virtualisation. We think it should consider creating a single business under a single VP to refocus the business and make its environment easier to adopt by users and developers alike.