The midmarket may look like the land of promise to virtualization vendors, but, realistically, the opportunities are scarce, says Midmarket Editor Lisa Vaas.Hysterical sellers may well be tossing
VMware stock out the window—as my colleague Steven J. Vaughan-Nichols
noted, as of midday on Jan. 29, the stock was down 32.9 percent from when the
market opened—but IBM's muscular embrace of
virtualization for small and midsize businesses on this same day shows that the
vendors still have high hopes.
High hopes, yes. Realistic ones? When it comes to the midmarket, it's a
dicey call.
At any rate, Microsoft
is out to virtualize Vista and has purchased
desktop virtualization company Calista Technologies, and then of course
there was the whopper virtualization play of them all: Citrix's
$500 million XenSource buy in August.
Obviously, virtualization is a boat that all the vendors are clamoring to
jump into. You can see the appeal for IBM:
Analysts are interpreting IBM's
SMB virtualization news as being, among other things, reflective of
its ambition to unseat the traditional operating system of choice in the
midmarket and smaller organizations, Wintel. The gist of IBM's Jan. 29 SMB
virtualization news blast was that it's extending its brawny Power6 chip
technology into its SMB-focused BladeCenter platform and has come out with new
virtualization servers and software, all aimed squarely at helping smaller
businesses consolidate servers, save on power and get a handle on server
management.
Charles King, an analyst at Pund-IT Research, noted that IBM
certainly has an interest in selling its Power-microprocessor-based systems to
smaller businesses. About a month ago, the company announced that it had
reorganized its hardware business into an enterprise systems group and a
business group. The mainframe organization is now being represented within the
enterprise systems group, and the business group encompasses small business and
the midmarket, which in turn encompasses both Power-processor-based p and i
systems and x86.
IBM's System i servers have had a
position in the SMB market for a very long time. The traditional operating
platform of choice in that group has been Wintel servers. Thus, the move to
push Power6 into the SMB market is a direct shove against that installed base,
particularly, as IBM itself pointed out in
its press release, against customers using Sun or HP equipment.
But, realistically, how many midmarket or smaller organizations will want to
move? Sure, the raw power in the new Power servers is hefty—the p520 Express
features one, two or four cores of a 4.2GHz Power6 microprocessor and up to
64GB of memory. But there just aren't that many small companies out there that need
that kind of memory, which will appeal to customers running
performance-sensitive applications or that require maximum performance from
business applications.
Unless you're talking about small businesses that are highly technologically
sophisticated and have such performance needs, the urge to move is going to be
scarce in the midmarket or below. The one example that IBM
likes to point to is Hoplon
Infotainment, based in Brazil,
a tiny company (fewer than 100 employees) that uses an IBM
mainframe to support its massively parallel virtual online gaming environment.
A company with fewer than 100 employees running a mainframe? It's a cool
story, King said wistfully, but it's the exception that proves the rule:
Virtualization, at least the way IBM is
envisioning it, doesn't make much sense for the vast majority of midmarket
companies.
Lisa Vaas is editor of eWEEK's Midmarket site. Send gossip, tips and
comments, be they big, medium or small, to lisa.vaas@ziffdavisenterprise.com.
