Citrix, VMware and Microsoft - the virtualization battleground

Implications: * Citrix has an impressive product portfolio, but is focused on the low enf of the market (SMB) and leads in the desktop and application area * VMware and Microsoft will square off in the enterprise datacenter business. VMware leads with 75-80% marketshare, but has limited management solutions, doesn't focus on any physical environments and is not priced competitively. Hence, VMware us rushing to lock-in customers with ELA's * Microsoft's pricing will make it attractive, as will their broad capability. VMware will need to broaden its strategy quickly and deliver better management capability. 

Analysis: It has been suggested that Citrix is poised to give VMware a run for the money. Citrix is largely focused on the desktop and application market and rarely competes with VMware. 

Yes, VMware is focusing significant efforts on the desktop space (as it is a tremendous opportunity in the marketplace). Think how manydesktops exist vs's servers in the datacenter. They will directly compete with Microsoft in FY Q4, 2008, when their product suite is released.

The true competition will be between VMware and Microsoft. Microsoft will enter the market with a disruptive price model. They will focus on BOTH physical and virtual management (which every customer has), whereas VMware focuses only on virtual environments (this is a naive and myopic view). Microsoft will also heavily focus on management capability, whereas VMware's traction has been with the hypervisor (fast becoming a commodity). VMware will have to quickly partner and/or acquire managemanet capability and offer more competitive pricing to retain their 75-80%marketshare.