VMware denies Microsoft gained market share at its expense

IDC survey of 2,500 users found VMware market share dropping

VMware officials objected to an assertion by IDC that VMware has lost some of its industry-leading market share to Microsoft, claiming that Microsoft's new Hyper-V product has barely made a dent in sales.

IDC stated last week that VMware's share of new x86 virtualization software shipments was 44 percent in the second quarter, with Microsoft clocking in at 23 percent. VMware's lead in last year's second quarter was 51 percent to 20 percent, and its lead in the first quarter of 2008 was 42 percent to 18 percent, according to IDC.

IDC attributed Microsoft's growth to the general availability of Hyper-V, a notion VMware officials scoffed at. Hyper-V was made generally available on June 26, with only a couple business days left in the second quarter, Mike DiPetrillo, a principal systems engineer at VMware, wrote in a blog posting that analyzes the IDC report.

"So did Hyper-V really ship enough units in 2 days to get 23 percent market share? I doubt it," DiPetrillo writes.

DiPetrillo accused IDC of basing the 23 percent figure only on "unit shipments from the OEMs," but this does not appear to be true. The IDC survey did examine OEM vendors like HP and Dell who offer servers that have already been virtualized, but that was a separate comparison and there's no indication in IDC's report that the VMware/Microsoft market share comparison was limited to OEM sales.

IDC analyst Brett Waldman explained IDC's methodology in a phone interview Wednesday, saying the analyst firm determined market share by surveying more than 2,500 virtualization users from 35 countries, examining public filings and having conversations with vendors. IDC's user survey looked at all new server virtualization licenses, regardless of whether they were sold through OEMs or other sources, he said.

On DiPetrillo's point that Hyper-V has only been generally available since June 26, Waldman said numerous Microsoft customers were using Hyper-V in production before then through an early adoption program. Most of Microsoft's virtualization market share comes from its pre-existing product, Virtual Server 2005, but Waldman said he expects Hyper-V's market share to continue rising.

DiPetrillo also questioned how IDC counted shipments of Microsoft's Virtual Server 2005, given that it is a free download off Microsoft's Web site. Waldman said the IDC survey only counted new licenses if they were actually put into production.

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