The virtualization market continues to shift towards the use of paid hypervisors says IDC

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After last week report and predictions from Gartner, this one is the IDC turn, which reports a very interesting details about the market trends:

…worldwide virtualization software revenue declined 18.7% year over year in 2Q09 to $344 million. Virtualization licenses did grow quarter over quarter in 2Q09. The server virtualization market continues to shift towards the use of paid hypervisors, with paid virtualization software now running on 60.8% of all new server hardware shipments virtualized in 2Q09, an increase over 57.2% in 2Q08…

IDC also adds that 16.5% of all new servers shipped in the second quarter of 2009 were virtualized, an increase from 14.5% in second quarter of 2008. However, actual shipments decreased 21% year over year to 246,000 physical servers in 2Q09.

Even more interestingly, IDC reports the OEMs market share in the virtualization industry:

  1. HP – 36% (shipments declined 18% year over year in 2Q09 but grew 1% sequentially)
  2. DellNot Disclosed (market share growth equal to 9% over first quarter 2009)
  3. IBM – 15%

Last but not least IDC reports about the VMware, Microsoft, Citrix and Parallels market shares (our emphasis):

VMware continues to hold the number 1 (VMware ESX) and number 2 (VMware Server) virtualization platforms despite revenues declining 22% year over year. This was slightly more than the decline of 21% in total x86 virtualization licenses.

Microsoft saw its virtualization license shipments decline 16% year over year, due to the continued depreciation of Virtual Server 2005. However, Hyper-V showed a sharp increase of 54%, one year after its official launch and entrenching itself into 4th place while it cannibalizes itself into the number 3 position, past Virtual Server 2005.

Parallels Virtuozzo rounds out the top 5 with license shipments declining 36% year over year.

Citrix XenServer showed the largest increase, growing 108% year over year due to the company changing its business model and offering the product for free with certain management functionality. It`s a bold seeding strategy that will see market share gains, but will take some time, if ever, to monetize.