Server Virtualisation Reaching a Global Peak

For years now, owners of small and medium-sized enterprises (SMEs) have been encouraged to embrace virtualisation of IT assets, from software such as Microsoft products to hardware such as servers. In fact, this trend has been picking up speed and trending for years in the general field of industry for a while, and finally seems to have peaked.

According to a report by information technology research company Gartner, the worldwide x86 server virtualisation market is expected to reach US$5.6 billion in 2016, a year-on-year increase of 5.7%. Yet despite this overall market increase, new software licences have declined for the first time since the market became mainstream more than a decade ago. Rather than new licences, it is maintenance revenue that is driving the market growth – and this indicates a rapidly maturing software market segment.

The market has been rapidly maturing over the last few years. Today, many companies have conversion rates of more than 75%, which shows the high level of penetration.

Server virtualisation may be the most common infrastructure platform for x86 server operating system (OS) workloads in on-site data centres, but Gartner analysts pose that new computing styles and techniques, including OS container-based virtualisation and cloud computing, will have a significant impact on this market.

Virtualisation is a proven software technology that makes it possible to run multiple operating systems and applications on the same server at the same time. Computer hardware was traditionally designed to run a single application on a single operating system, which leaves most computers vastly underutilised.  Virtualisation is a proven software technology that makes it possible for you to run multiple operating systems and application on the same server at the same time with each virtual machine sharing the resources of one physical computer.  Because each virtual machine is isolated from other virtualised machines, if one crashes, it doesn’t affect the others.

Interestingly enough, these trends vary greatly according to the size of the organisation. As per Gartner, the use of server virtualisation among businesses with larger IT budgets remained mostly stable during 2014 and 2015. While it remains an important and heavily used technology for these businesses, the truth is that this market segment is fast approaching saturation.

On the other hand you have organisations with smaller IT budgets, and these expect a further decline in usage to 2017 at the earliest. And this is causing an overall decline in new spending for on-site server virtualisation.

Gartner believes that this can be ascribed to an increase use of “physicalisation” (the opposite of virtualisation) by businesses, where multiple physical machines are placed in a rack unit and servers are run without virtualisation software. More than 20% of these businesses expected to have less than one third of their x86 server OS virtualised by next year; this is nearly double the amount expressed in 2015.

There are many different rationales behind this. Businesses have more options thanks to the rise of software-defined infrastructure and hyperconverged integrated systems; this, in turn, increased pressure on best-of-breed virtualisation vendors to add more out-of-the-box functionality, provide a better experience and deliver faster “time to value”, which is the period between a request for a certain value and the delivery of the value.

Regardless of these trends, which may either change the newly established status quo or be just another fad, you cannot deny the benefits inherent to virtualisation and the effect it has had on how we manage IT infrastructure. It is and will remain a large, if not the largest, solution preferred by the majority of traditional businesses.

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