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Microsoft Gains Ground in Virtualization

Lasting fame is rare in our YouTube culture. Gone are the days when Jaws or Star Wars would dominate at the box office for months. Movies come and go, make millions and then fade off into cultural oblivion.

TV, once the home of massively popular sitcoms that nearly everybody seemed to watch, is now one bad reality show after another. The "characters" quickly fade from memory. Music? Well, we wouldn't know much about that here at RCPU, but it strikes us that today's stars will probably only be famous tomorrow if their lives go completely off the rails.

And so it goes, albeit much more slowly, with technology. Hype about one category of technology or another comes and goes, ebbs and flows, and one red-hot trend eventually gives way to another. If this week's news is any indication, it's virtualization that's coming off the boil just a little bit, downgrading as a market from red-hot to simply growing.

Yes, we know. The economy plays a role in the speed of market growth, but we suspect that there are other factors at work here. For one thing, virtualization isn't a novelty anymore, and there's bound to be a bit of market saturation now that lots of companies have gone from craving it to using it. That's normal. Plus, we speculate, a few unforeseen concerns -- security comes immediately to mind -- might be dampening enthusiasm for the technology just a bit.

What's not slowing, though, is Microsoft's push into the space. The same IDC report that noted virtualization's slowdown also pointed out Microsoft's gains in market share in the space with Hyper-V. Apparently Microsoft's, um, aggressive pricing strategy (better known as under-pricing VMware or giving stuff away for free) is working, at least to some extent -- which should be little surprise, as Microsoft has almost always had success undercutting competitor's prices in new markets.

And, let's be clear -- virtualization is still a hot technology; Gartner even says that it'll be the hottest of all in 2009. But it's not quite as red-hot as it has been for a couple of years. So we're not burying virtualization here by any means -- we're only saying that it seems to be going from, say, box-office smash to top DVD seller. Either way, there's still money to be made. And it's still better than reality TV.

What's your take on Microsoft's presence in virtualization? Are you making money off of it? Sound off at lpender@rcpmag.com.

Posted by Lee Pender on 10/21/2008 at 1:22 PM


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