By David Marshall
published: Wednesday, January 24 2007
Virtualization, what is it? And why do I need it?
Virtualization is one of those buzzwords that is being freely floated around the industry left and right, and can mean so many different things to so many different people. Lately, virtualization has been getting a lot of press coverage, and industry analysts are telling business organizations that this is a “must have” technology. It’s even been said that if you haven’t already at least started to look at how virtualization can be used within your company, you’re probably already falling behind.
So, what exactly is virtualization? In the context of this discussion and to put it in the most simplistic terms, virtualization technology is a way of making a physical computer function as if it were two or more computers or even a totally different computer altogether. Obviously, as stated, this is a very simple explanation of a complex term and is coming from a 20,000-foot view of things. However, it’s enough to get you started down that road of thinking.
Staying within that context and dropping a few thousand feet, virtualization should be thought of as an abstraction layer that separates the physical hardware from a single operating system. It allows a single physical machine to run multiple virtual machines with heterogeneous operating systems, side-by-side in isolation. These virtual machines can then be allowed to either interoperate or they can be totally unaware of each other. Each virtual machine operates with their own set of virtual hardware (Processor, Memory, Network Adapter, Hard Drive, etc.) and is then loaded with its own operating system and applications. The virtual machine’s operating system (or guest operating system) sees a consistent or normalized set of hardware regardless of the underlying physical hardware.
From a business perspective, there are many ways in which your organization can benefit from using virtualization.
- Maximize resources – Perhaps the most common problem being solved with virtualization today - applications are running on their own dedicated servers, which results in low server utilization rates across the server environment. Server consolidation is used to help maximize the compute capacity on each physical server which therefore increases ROI on existing and future server expenditures.
- Test and development optimization - Test and development servers can be rapidly provisioned by using pre-configured virtual machines. By leveraging virtualization, development scenarios can be standardized and quickly executed upon in a repeatable fashion. It also allows for increased collaboration, and ultimately helps with delivering a product to market faster and with less bugs.
- Quickly respond to business needs – Deployment processes are becoming more difficult to manage in a complex environment and IT is unable to adapt as quickly to changing business requirements. Moving to a virtual environment helps with procurement, setup and delivery, giving IT the efficiency needed for rapid deployment.
- Reduce business continuity costs – Virtualization encapsulation (creating an entire system into a single file) and abstraction (removing away the underlying physical hardware) help to reduce the cost and complexity of business continuity by offering high availability and disaster recovery solutions where a virtual machine can easily be replicated and moved to any target server.
- Solve security concerns - In an environment where systems are required to be isolated from each other through complex networking or firewalls, these systems can now reside on the same physical server and yet remain in their own sandbox environment, isolated from each other using simple virtualization configurations.
Virtualization can address these and other issues to help organizations reach operational efficiency and data center agility. Virtualization should be thought of as an enabling technology that can help IT organizations deploy creative solutions to help solve business challenges.
Are people really using this technology or is it just more media hype?
Virtualization does have a number of challenges to overcome. In fact, in order to get where it is today, one of the biggest hurdles that it had to clear was the notion that it wasn’t a data center, production-ready technology. Once it got beyond the reputation of simply being “cool” and finally achieving its “must have” status, the technology has continued to gain strong momentum. It also gained momentum as it moved beyond just being thought of as a server consolidation tool. In a study based on 150 interviews with early adopters, Andi Mann, an IT consultant with Enterprise Management Associates (EMA), identified that disaster recovery and business continuity were the number one drivers of virtualization. As companies continue to move beyond a single use-case scenario for server virtualization, the excitement around virtualization will only continue to get stronger.
However, like any new technology, when something first gets introduced, naysayers are usually the first on the scene and reporting things louder than most. However, it seems like virtualization was dealt a pretty straightforward and fair hand. Most of the problems, questions or concerns that have been raised by consumers have been completely legitimate.
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Windows shops feared installation and operation of VMware ESX Server – With its Linux like interface, at first glance the product didn’t seem to fit within the “normal” Windows application parameters and probably seemed too confusing.
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Linux shops may not have adopted VMware ESX Server quickly because it was a commercial package – Linux operators are more prone to accept open-source software.
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Lack of training and expertise – To become an early adopter of virtualization basically meant that you had the time and patience to teach yourself the product. There were no training courses or books on the subject. Therefore, with a lack of experts in the field from which to hire, organizations weren’t quick to adopt and implement a technology that it didn’t have an employee pool to pull from.
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Management cost – While virtualization certainly seemed capable of solving capital expenditure (CAPEX) issues, there seemed to be a gaping hole in operating expenditures (OPEX). Managing a physical and virtual data farm became a complex task without the proper tools being made available.
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Technical support issues – There have been instances where trying to solve a problem with an application running inside of a virtual machine with a vendor’s technical support group has been challenging. Support specialists may insist that the problem be reproduced on a real server environment to ensure that virtualization isn’t the root cause.
Once the industry started to identify and correct these and other concerns, adoption and proliferation seemed evident.
Ok, so the buzz about virtualization isn’t just marketing fluff or media hype. And even though the term “virtualization” seemed to be going around the IT world like an epidemic, widespread buzz about a product doesn’t always mean that there’s something there. But since that doesn’t seem to be the case with this technology, the next question becomes - are people actually using it? Reports coming from analyst firms such as the Yankee Group, IDC and Gartner seem to signify that the answer is a resounding “yes”.
On July 2006, US analyst firm, the Yankee Group, released its server virtualization findings after polling 1,700 managers and executives worldwide, revealing that three out of four businesses, regardless of size, either have or plan to deploy server virtualization over the next 12 months. Only 4% of respondents, ranging from the smallest SMBs to the largest multi-national enterprises, said they had no plans to install a virtualization solution.
Those businesses that were able to quantify the TCO achieved after installing server virtualization technology offered the following information: 10% said they cut TCO costs by somewhere between 10 and 20%; 13% indicated they shaved their TCO costs by 20 to 30%; another 17% said their TCO costs declined by 30 to 75%, while 8% estimated they had achieved cost savings ranging from nearly 50% to over 75%. Clearly, there are organizations that are reaping the benefits of server virtualization.
Analyst firm IDC announced in October 2006, the worldwide virtual machine software (VMS) market grew to $560 million in 2005, a robust 67% growth over the previous year and topping the 63% year-over-year growth recorded in 2004. John Humphreys, research director for IDC’s Enterprise Computing Group, predicts that an already strong virtualization software market will expand to more than $1.8 billion in 2009. The market is currently around $810 million, which is up 46% from the $560 million in 2005.
Humphreys said, “The growth in the dynamic VMS market will continue as organizations increasingly deploy VMS as a means of decoupling the application stack from the underlying hardware.” He continues, “While we believe VMS is a foundational technology to the creation of dynamic IT environments, the challenge going forward is to get users to integrate virtualization with legacy management tools and enhance management functionality to solve specific business issues.”
In a recent report issued by analyst firm Gartner, their study showed that the emergence of virtualization - and its ability to run multiple virtual machines on a single server – has slowed the demand for servers. Jeffrey Hewitt, a research director at Gartner, said that while the reported numbers were a good sign for the server marketplace, the results could have been much higher if not for the effect of virtualization.
VMware Leading the Way
Virtualization is not a new concept. In fact, it’s been around for 40 years now. In the early 1960’s, it was IBM who was the original driving force behind virtualization as it introduced us to “Time Sharing” and the partitioning of large, mainframe hardware going back to the IBM M44/44X and CP-40 days. Over time, cheaper and more efficient minicomputers and PCs began to chip away at mainframe dominance, and so virtualization went the way of the dinosaurs.
But it was VMware, founded in 1998, which brought virtualization back to the forefront and is now considered by many to be the first company to offer a commercial x86 virtualization platform solution. And as such, it was VMware that ultimately emerged as the virtualization market leader in 2004, much to the chagrin of IBM. Fast forward to 2006, despite increased competition, VMware continues to dominate the field of virtualizing machines built on top of the industry-standard x86-based architecture. Industry analysts estimate that VMware is the dominant virtual machine software vendor, with a market share of over 55%.
Any questions about the financial stability or future of VMware were quickly answered by its parent company, EMC, at the end of the third quarter in 2006. VMware reported that its third quarter revenues compared to the same time period just one year prior had gone up by nearly 86% to $189 million. Looking at the company’s financial track record shows a staggering trend. The annual revenue recognized by VMware in 2003 was $100 million, in 2004 - $218 million, and in 2005 - $387 million. But just in the first half of 2006 alone, the company had already reported revenue of $288 million which placed the company on track to earn nearly $750 million for 2006. With more than 20,000 companies already running VMware technologies, which include 99 of the Fortune 100 companies, VMware anticipates that this growth trend will continue.
To keep the momentum going, the company is constantly looking for ways to improve on their existing product lines and expand their product offerings. In June, the company began shipping their latest enterprise solution, VMware Infrastructure 3, to help fuel sales in the second half of 2006. Moving along the application stack, VMware acquired Akimbi Systems to help provide what it calls “virtual lab automation”, a configuration management and self-service provisioning solution for its customers, which the company ultimately transformed into their own solution – VMware Lab Manager 2.4. Not satisfied with simply dominating the Linux and Windows world, the company announced a public beta of a new virtualization product for users of the Apple Intel-Mac platform, currently code-named “Fusion”.
The Redmond giant enters the market
In February of 2003, Microsoft made an announcement that it was going to purchase “virtual machine technology” from a company called Connectix Corp., which made the Virtual PC line of products. Microsoft said that the newly acquired technology would enable the company to support a virtual machine solution to help customers consolidate server resources, reduce hardware expenditures and operating costs. Rather than acquiring the entire company, Microsoft instead purchased the client and server versions of Connectix’s virtual machine technologies that run on Windows and Macintosh operating systems.
While Microsoft did see value in the desktop virtualization market that it had just invested in, the main reason Microsoft purchased the technology was to assume control of Connectix Virtual Server, a beta version of the company’s server-class virtualization offering. Microsoft’s intention was to use this product to eventually help customers migrate off of the legacy Windows NT 4.0 operating system. With the operating system nearing end of life and its support life-cycle timeframe coming to an end, companies were still refusing to migrate to newer Windows operating systems, mainly because their applications (whether home grown or purchased) were NT 4.0 specific and either would not work or had no upgrade path to the latest and greatest Windows versions or hardware platforms. By virtualizing multiple Windows NT environments on to a single server, Microsoft customers could continue to support legacy applications in a cost-effective way. And it also gave customers the valuable time needed to refresh older infrastructure systems first, and then either upgrade, re-write, or replace non-serviceable, legacy applications on a timetable that made business sense.
Microsoft’s virtualization plan had them focused on supporting legacy application re-hosting, server consolidation, and automation of software development and test environments. They released their first virtualization product, Microsoft Virtual PC 2004 in December of 2003. However, their planned entry into the x86 server virtualization market was delayed due to a new Microsoft company-wide security initiative. Microsoft Virtual Server 2005 was finally released in mid 2004 with two versions being made available, a standard edition supporting up to four physical processors and an enterprise edition supporting up to 32 physical processors. Initially, the company did its best to steer clear of promoting its product for data center mission critical servers; however, Microsoft was still able to achieve an impressive 29% market share grab in a VMware dominated arena.
And while Microsoft may have showed up late to the party, the Redmond software giant finally seems to have the right virtualization story to tell. Rather than focusing on its hosted virtualization platforms, Microsoft now understands that the future of virtualization is in the hypervisor or in “bare-metal” virtualization. The introduction of Xen probably had more to do with this epiphany than anything that VMware could have done. So now, the company is trying to position itself as the dominant player in the virtualization market by promising to release its own hypervisor, code-named “Veridian”, in the next version of its Windows Server product – Longhorn. Interestingly enough, Microsoft has even enlisted the help of long-time rival Novell and relative newcomer XenSource to help them achieve that goal.
The Great Virtualization Price War of 2006
Back in 1999 and 2000, there really wasn’t a whole lot of discussion about virtualization in the business community. On industry-standard x86-based server platforms, it was VMware that ruled the roost, and even then, Workstation and desktop virtualization was the dominant platform type. Virtualization wasn’t getting a lot of respect or attention; in fact, it was considered by many to be nothing more than a hobby or enthusiast product and certainly wasn’t deemed as production worthy. In addition to that, it seemed as though the cost was disproportionate to what the product offered.
The first battle came in the form of education. If virtualization was going to proliferate throughout IT, there would need to be a compelling argument or need for it. Once the education phase was complete, the next battle would be cost justification.
The next battle in the great virtualization price war might be described by some as a David and Goliath story of virtualization. That is, if you could ever realistically consider Microsoft as David going up against someone else being thought of as Goliath. In any case, the next battle in this war was about to begin between Microsoft and the virtualization market leader and industry giant, VMware.
When Microsoft Virtual Server first hit the scene, it may have caused a slight stir in the virtualization giant. With the introduction of Microsoft's server virtualization product near the end of 2004, VMware prices started to come back down to Earth - just a bit. VMware Workstation licenses suddenly dropped in price from around $300 at that time to $189, and the company's entry-level server class virtualization product, VMware GSX Server, slashed its prices from $2,500 on a two-way server down to $1,400, and larger servers were slapped with an even bigger discount. For example, a large 16-way server that would have cost approximately $20,000 now sold for a much more palatable $2,800. But this was only the beginning to the great virtualization price wars.
In order to respond to VMware's price cuts, Microsoft dug deep in November of 2005 to perform a little price cutting of its own. Along with the announcement of the release of their latest version of Virtual Server 2005 R2 came a new price that even a mother could be proud of - Virtual Server 2005 R2 prices would drop from $999 to $199 for the Enterprise Edition and $499 to $99 for the Standard Edition. Virtualization was actually becoming an inexpensive solution worth implementing in the SMB market.
But right about the same time as Microsoft's news hit the wire, VMware swung back releasing a new product to market called VMware Player - and best of all, it was free! This new software solution would allow people for the first time to download and try out pre-configured virtual machines that were created with other VMware products. And so the price war continued. But with VMware Player being released for free, a virtual can of worms was opened and a new price point began to hit the streets, much to the delight of the consumer.
In the month of February 2006, VMware continued its journey of free virtualization as it announced the release of VMware Server. The product would become the free replacement for VMware GSX Server, and would be the most comparable VMware offering to Microsoft's Virtual Server product. Microsoft then answered that challenge in April 2006 by making Microsoft Virtual Server 2005 R2 freely available for download. And they followed that announcement with yet another in July of that same year, Microsoft would immediately make Microsoft Virtual PC 2004 SP1 free to the consumer and would make its successor desktop virtualization product, Microsoft Virtual PC 2007, free as well once completed. In June of 2006, VMware announced the release of its most sophisticated enterprise-class virtualization suite yet, VMware Infrastructure 3. And while the solution wasn't free, VMware did lower their prices to make the offering more attractive.
As Microsoft and VMware continued their virtualization price war, other companies were looming in the background, waiting for their own chance to enter the battle and make a name for themselves in this space.
So what about Xen technology?
In late 2004, Xen 2.0 was still trying to fight what seemed like an uphill battle as it took on the "established" commercial x86 server virtualization market to try and gain a foothold and establish itself as a key player. The product started to see some significant growth in the ASP and hosting business, but still couldn't crack the enterprise market where VMware dominated. To achieve that goal, the open-source project had a number of obstacles to overcome. Xen was considered by many to be extremely difficult to install as well as operate.
Once the product was installed and up and running, it could handle virtualizing Linux guest operating systems fairly well, but virtualizing a Microsoft Windows operating system was another story. One of the lures to using VMware at the time was something that Xen just couldn’t achieve on its own, and that was the ability to run an unmodified Windows guest operating system.
Things would change about a year later with the advent of native support for hardware-assisted virtualization technology from both Intel (Intel-VT) and AMD (AMD-V). With the release of Xen 3.0, the project finally delivered a compelling virtualization feature set that was targeted at enterprise infrastructure virtualization needs. Xen became focused on the support for enterprise applications with the addition of symmetric multi-processing (SMP) support, large memory configurations and near-native performance, and it now had the ability to virtualize all guest operating systems without the need for modification.
Because it is an open-source hypervisor solution, Xen is quickly being embraced as an industry standard. To help become the de-facto standard, Xen has become part of a broad community that is made up of all of the major processor and server manufacturers, operating system providers as well as dozens of universities. The community is working closely together on this project to make sure that it delivers an industry standard, enterprise-class virtualization solution. And although VMware and Microsoft offerings have been around a few years longer than Xen, that gap is expected to narrow as innovation and new solutions continue to get created around the Xen platform.
Virtual Iron 3.1 and XenSource take Xen to the next level
The virtualization competition was about to start rapidly heating up. What began with a price war between industry giants VMware and Microsoft, now continues with further price challenges as the virtualization landscape widened to include newcomers Virtual Iron and XenSource.
While Virtual Iron and XenSource are not the same company, they have both introduced new proprietary virtualization software that is built on top of the open-source Xen platform. Both companies are directly aiming their sights on market leader VMware in hopes of attracting some of that market share for themselves and thereby slowing down VMware’s record growth rate. Both companies agree that VMware’s prices are too high, and each company has released a set of products that intend to directly combat that very issue.
“We are taking a very aggressive stand on pricing,” said Mike Grandinetti, Chief Marketing Officer for Virtual Iron. With a price point of $499 per socket on a perpetual license basis, Virtual Iron hopes to establish a clear price leadership position in the market with Version 3.1 of its software. The company’s price point comes in at less than 20% of a comparable VMware license which is $2,875 per socket. Grandinetti claims their product is equivalent to VMware Infrastructure 3 and at a fraction of the cost.
The Xen hypervisor implemented by Virtual Iron offers large memory support of up to 96GB of main memory per virtual server and can span up to 16 processor cores in a single system image. The Enterprise Edition is a multi-system license, and customers can get a 30-day evaluation license of the software. The company is also offering a single-system variant that comes with a free perpetual license. The free product runs on a single machine and can provide for up to 80 virtual servers per physical server. And like the full version, it supports 32- and 64-bit Windows and Linux operating systems. Virtual Iron 3.1 is feature rich and competes directly with VMware Infrastructure 3. It contains live migration and dynamic capacity allocation of resources. It also comes with LiveRecovery to help automatically recover from hardware failures.
XenSource is also taking it straight to VMware when it comes to price. XenEnterprise pricing starts at $488 for an annual subscription license per dual socket server, and also offers a perpetual license for $750 per dual socket server. The company is also offering XenServer, which is aimed specifically at Windows shops. Key features include Windows compatible guests, up to eight concurrent virtual machines, multi-host management console, network storage support and resource controls for CPU, memory, networking and disk I/O. Pricing on this package is $99 for an annual subscription rate for a dual socket license. The company also offers a free version of the product, XenExpress, which offers all the performance and features of the Enterprise version but is limited to a single server running a maximum of four virtual machines.
XenSource is working on adding additional features such as live migration, 64-bit support, high availability and failover, and concurrent shared storage support in the first half of 2007. Adding these features will help put the product on a more even level with VMware Infrastructure 3.
One of the remaining questions about Xen is the level of difficulty involved with getting it setup and running. Peter Levine, President and CEO of XenSource may have put that question to rest by saying “installation has to be absolutely simple, simple, simple. It should not take more than ten minutes from install to running Xen to running a guest system.”
Both companies hope to gain attention by taking a cue from the price war between Microsoft and VMware. Virtual Iron and XenSource are both offering free versions of their solutions. However, unlike Microsoft and VMware, the two companies are offering free versions of their products that include a hypervisor that runs on top of bare-metal, which means performance should be closer to near native unlike Microsoft Virtual Server and VMware Server which require a host operating system and therefore take the performance penalty.
The question then becomes, is this enough to entice IT organizations to put their trust into one of these two companies rather than going with a solution from either Microsoft or VMware? Pricing is probably a much larger concern for a SMB, but not as much for a large enterprise organization. The Xen newcomers will have to convince people that their product maturity and company size aren’t limiting factors when being compared to the much larger and more established competitors. Price is also not the only concern that these companies have to face. Like Microsoft and VMware, their sales forces will still have to contend with other virtualization road blocks such as the perceived problem of a single point of failure on a physical machine killing all virtual machines on that box, the idea that virtualization is complicated which leads to the hidden costs of either hiring virtualization experts or having to train existing staff, and trying to show customers the real ROI or benefits of migrating to a virtual environment.
The pricing differential that these two products offer may get consumers into the store, but price alone is not enough to get people to buy this type of technology. One thing is certain, consumers now have a much wider choice of virtualization solutions from which to choose.
What happens in 2007 and beyond?
Virtualization will become a necessity for enterprises to control and maintain normal, everyday business activities.
Today, the most widely used feature or functionality of server virtualization is to partition a server into multiple virtual machines for the purpose of doing server consolidation. In this way, IT staff can consolidate their physical infrastructure allowing them to get maximum performance from their existing and future hardware investments. In 2007, focus will shift from server consolidation to capacity management strategies and to business continuity in order to solve disaster recovery and high availability issues.
Software manufacturers will continue to embrace virtual appliances as a mechanism of software delivery and software packaging. Rather than distributing an installation executable with a set of files, software will be delivered already installed and ready to go inside of a virtual appliance, where the guest operating system will be abstracted away from the end user. Software manufacturers will also make use of virtual appliances to deliver software demonstrations to potential customers rather than providing them with installation media or a downloadable file.
Heterogeneous management of both physical and virtual servers will come to the forefront for SMB and large enterprises as companies continue to adopt virtualization.
As virtualization continues to become accepted in the market, the number of virtualization vendors will continue to rise. Pricing for the underlying virtualization technology (the hypervisor) will continue to fall to at or near zero. Virtualization vendors will continue to make money with added features and components that help differentiate their offering from other vendors as well as for added levels of product support and product upgrades.
Virtualization adoption will continue to have an effect on the x86 server market. Revenues for this market will remain relatively flat. During this period, companies will be upgrading to newer server platforms/processors that support both 64-bit and the newly added virtualization technologies (Intel-VT and AMD-V) which should help keep the server market from declining.
David Marshall
David Marshall is the Director of Business Development and Product Marketing at InovaWave, a company that is leading the effort to improve virtualization density and increase virtualization performance. He also runs the InfoWorld Virtualization Report, as well as the virtualization news blog, VMBlog.com. David is also a co-author of the book "Advanced Server Virtualization: VMware and Microsoft Platforms in the Virtual Data Center", a book that details years of hands on experience using and implementing server virtualization solutions.
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