Can Microsoft Live Up to the Hype(r-V)?

The software giant is in the thick of a virtualization battle but is still chasing VMware.

"Slow and steady" has often been the Microsoft mantra. When entering new markets, the company has often been a laggard, slow to recognize emerging opportunities and delivering first releases that generally lack the functionality found in competitive solutions. It usually takes the industry Goliath a few revs of a product cycle to close the gap and make itself into a formidable market force.

Such a scenario appears to be unfolding with Hyper-V, the Microsoft virtualization product. When introduced a few years ago, the product significantly trailed competitive systems -- mainly the solutions from market kingpin VMware Inc. During the past few years, Microsoft has tried to catch up and has made some progress. "Microsoft is battling for second place in the virtualization market; everyone is well behind VMware," says Gary Chen, research manager for Enterprise Virtualization Software at IDC.

Microsoft has put a lot of time and effort into its next release, Hyper-V 3.0, which has been tied to the company's delivery of the Windows Server 8 product. The enhanced virtualization system promises more scalability, manageability and flexibility, so it could be more appealing to enterprises. But the question remains: Will the new release be sufficient to provide Microsoft with enough momentum to allow it to challenge perennial market leader VMware?

A Slow Start
Microsoft Hyper-V, formerly code-named "Viridian," is a hypervisor-based virtualization system for x86 to x64 systems. The software debuted with Windows Server 2008 in early 2008; the virtualization software was bundled in the server product at no charge to customers. As with most new products, Hyper-V version 1.0 lagged in the field with regard to features.

"VMware had been delivering virtualization software and has had a significant jump on competitors," states Mark Bowker, senior analyst at market research firm Enterprise Strategy Group.

The Redmond behemoth tried to close the gap with a second version, which was delivered in October 2009. This time, Hyper-V was available as a free standalone product as well as being bundled with Windows Server 2008 software. With version 2.0, Microsoft added a Live Migration feature, which enabled customers to move functioning applications among servers without service interruptions. That improvement was much-needed because IT systems have become such a fundamental component in daily business operations that corporations demanded the ability to update their software without taking down their business applications. A related improvement was the failover clustering function, which automatically switches workloads among systems if a performance problem arises.

The company also beefed up the product's scalability. The system works with up to eight-socket physical systems, supports up to 32 cores and functions with up to 1TB of RAM on a physical system. Manageability was another area of focus. A new Hyper-V configuration utility simplified common initial configuration tasks, so technicians no longer had to tinker with long command-line strings. The management system offered more flexibility -- technicians were able to remotely monitor systems and updates were sent based on their preferences: immediately, at a set time or whenever they desired.

Appealing to the Traditional Base
The improvements helped the virtualization product gain more supporters, who came primarily from businesses that rely heavily on Windows. "Microsoft has done a good job of integrating Hyper-V as a role within Windows Server, and they've done a good job of providing integration with System Center for managing physical servers running Hyper-V as well as virtual machines running in Hyper-V," says Michael Cherry, lead analyst, operating systems, at market research firm Directions on Microsoft. For instance, the vendor has enhanced its System Center management framework, so it offers businesses simpler ways to manage physical and virtual Hyper-V and VMware environments.

One Firm Crowns Hyper-V the Winner
Microsoft has increased its presence among midmarket customers, many of whom only recently began to show interest in virtualization. One example is Kroll Factual Data, a firm with 300 employees that provides information services to the mortgage industry. The company delivers credit reports, risk-assessment reports, business background research, collection information services and employee screenings. The corporation wanted to reduce its datacenter costs as well as enable its server infrastructure to better meet spikes in demand. Its business activity often fluctuates. For example, changes in interest rates or federal lending policies can create surges in demand for the firm's services.

Traditionally, about two weeks were needed to configure a server. In addition, Kroll Factual Data experienced significant growth during the last five years, acquiring 58 companies. The IT staff had to physically transport an acquired firm's servers to the Kroll Factual Data datacenter, start up the servers and ensure they were operational, and then integrate the new systems into its datacenter. The process was extremely time-consuming (taking 30 to 60 days), involved a huge amount of risk (components didn't always work together) and resulted in occasional failures. Consequently, the corporation's IT professionals spent their time on mundane server-configuration tasks rather than on creating new, value-added business applications.

As a result, the business wanted to consolidate its datacenter so the company could respond to changes faster and more efficiently. In early 2008, Kroll Factual Data took a look at the virtualization software market and evaluated the available products, including Citrix XenServer, Hyper-V and VMware. The financial services company ultimately selected Hyper-V.

"About 99 percent of our applications run on Windows, so it made sense for us to go with the Microsoft solution," says Chris Steffen, principal technical architect at Kroll Factual Data, which has served as a beta site for all three Hyper-V releases.

Kroll Factual Data began updating its servers to Windows Server 2008 Datacenter with Hyper-V, a process that took several months. Upon completion, the company dramatically pruned its physical servers, going from 650 servers to 22 systems. In addition to cutting its annual hardware expenditures by tens of thousands of dollars, the company reduced its energy costs by $440,000 annually. Finally, provisioning a virtual machine (VM) now takes 10 to 15 minutes rather than the weeks typically required previously. Consequently, the Kroll Factual Data IT staff now concentrates more on higher-value projects and less on deploying, maintaining and upgrading servers.

Catching up in Functionality
The improvements have helped Microsoft gain followers, but Hyper-V version 2.0 still didn't offer as much scalability and functionality as VMware. So Microsoft has recently started banging the drum for Hyper-V version 3.0, which will arrive with Windows Server version 8. The vendor hasn't set firm shipment dates for these products, but analysts expect them to arrive (at least in some form) this year. The new Hyper-V will require a 64-bit system that has Second Level Address Translation (SLAT), a feature present in the current generation of 64-bit processors delivered by Intel Corp. and Advanced Micro Devices Inc. Users will also need a 64-bit version of Windows 8 and at least 4GB of RAM. Hyper-V supports creation of both 32-bit and 64-bit OSes in the VMs.

Dramatically Improved Scalability
A number of enhancements are on deck, starting with beefed-up scalability. Hyper-V 3.0 runs on a host machine with up to 160 logical processors (meaning cores or hyperthreads) and up to 2TB of RAM. It also supports VMs with up to 32 vCPUs (with more promised in the future) and 512GB of RAM each, up from four vCPUs and 8GB of RAM in version 2.0. That improvement should make virtualizing mission-critical, large-scale apps much more practical. In addition, the new Microsoft VHDX file format supports virtual hard drives that break the 2TB barrier -- they can now go right up to 16TB. The new hypervisor also supports 63-node clusters with 4,000 VMs per cluster, and its replica feature allows businesses to put a replica VM on another Hyper-V server in a remote location and keep the replica synchronized with any system changes. The result is that companies will be able to manage remote computers more easily.

The new release offers businesses more flexibility. VMs can be moved over a LAN cable or a Wi-Fi connection, if a customer desires. Microsoft has also upgraded its quick storage migration function so companies can move large numbers of VMs and their disks at the same time, a task that previously required two steps.

Finally, Microsoft beefed up the Hyper-V virtual switching with a far more capable and extensible virtual switch. Out of the box, the product can shape traffic to provide maximum and minimum bandwidth guarantees to VMs.

VMware Still Top Dog
While the enhancements are noteworthy, VMware still leads the functionality race in a few areas. It supports more than 1TB of RAM in each of its guests, which is about double what Microsoft offers. "There's a larger number of third-party supporters -- a better ecosystem -- for VMware than for Hyper-V," says IDC's Chen.

So what does the future hold? The interplay between virtualization and cloud computing means that interest in virtualization systems will continue to rise. Microsoft has been making consistent headway, with Redmond benefiting from midsize business customers moving to virtualization.

"Microsoft has a strong SMB distribution channel, so they should be able to increase their presence in the virtualization market as more of these companies deploy virtualization technology," says Enterprise Strategy Group's Bowker.

However, VMware's No. 1 market position appears solid. "VMware will likely continue to be the key provider of virtualization technology, in part because customers are likely unwilling to change until there's a compelling need or reason," explains Directions on Microsoft's Cherry. "You don't mess with server systems unless there's a valid reason to do so."

Rather than vie for the top spot, Microsoft might want to focus on becoming the solid second choice. "Citrix is focusing a lot of its efforts on its desktop virtualization solutions," notes Chen. Consequently, there's an opportunity for Microsoft to gain share and then slowly and steadily set its sights on VMware some time in the future.

About the Author

Paul Korzeniowski is a freelance writer based in Sudbury, Mass. He has been writing about networking issues for two decades, and his work has appeared in Business 2.0, Entrepreneur, Investors Business Daily, Newsweek and Information Week.


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