Rows of servers like these could become fully automated with software-based networking
Despite impressive third-quarter results from VMware , the virtualization market is still reeling from the effects of the recession, according to the latest research from analyst firm IDC.
VMware, a virtualization trailblazer and analyst darling, blew past Wall Street's estimates last week, boosted by strong U.S. government sales. IDC, however, warns that the broader virtualization market has taken a hit during the economic downturn as firms tighten their spending on server hardware.
Just over 16 per cent of new servers shipped during the second quarter were virtualized, according to the firm's research, up from 14.5 per cent in the same period last year. Actual server shipments, however, fell 21 per cent to 246,000, and virtualization software revenue dipped 18.7 per cent to $344-million (U.S.).
Virtualization, which lets users divide physical hardware into multiple "virtual" chunks, has become popular among users looking to juggle myriad of operating systems and applications. With companies also struggling with budget pressures, VMware and its rivals are pushing virtualization as a way for firms to reduce the amount of server and storage hardware within their data centers.
Oracle , for example, snapped up virtualization specialist Virtual Iron earlier this year, and Citrix recently teamed up with Microsoft in an attempt to challenge VMware.
Even in a slowly recovering economy, there are still plenty of positives for virtualization, which is widely regarded as one of the hottest technologies of recent years. Virtualization licenses, for example, grew sequentially in the second quarter, according to IDC.
"We believe that virtualization will be a cornerstone technology as medium and large enterprise organizations around the globe accelerate the need for more dynamic and converged infrastructure," said Matt Eastwood, IDC group vice president, in a statement.
IDC's research also found that more firms are paying for their virtualization software, eschewing the slew of free technologies that are available.
"Despite economic worries, we are seeing the continued increase of paid virtualization platforms, as it now accounts for more than 60 per cent of all x86 virtualization license shipments," said Brett Waldman, IDC research analyst. "This is due to the maturation of virtualization deployments and the need for greater control."
VMware shares rose 72 cents, or 1.62 per cent, to $45.09 in early trading Monday, mirroring the broader advance in tech stocks that saw the Nasdaq rise 1.08 per cent.