Virtualization is evolving at a phenomenal pace. VMware is feeling KVM's hot breath now as the open-source upstart reaches maturity.
If you'd asked a few years ago what company does virtualization properly, the answer would invariably have been VMware Inc. (NYSE: VMW). It had the right stuff, it drove the technology, and its products worked solidly. But the game has changed. KVM has grown up. A study by Clabby Analytics found that feature-wise, there is little difference between the solutions. In fact, KVM appears to have a slight performance edge.
Where KVM stands out is in pricing. It's an open-source offering with no license fee. VMware's high prices have been a barrier to entry among ISPs. Most deployments use the Red Hat Inc. (Nasdaq: RHAT) distribution of KVM, so they get adequate levels of infrastructure software and support. The three-year TCO comparison reflects similar costs for support across Red Hat and VMware, on top of the latter's license fee.
Cheaper or free
Depending on how you cut the Clabby numbers, the Red Hat KVM cost is around 40 percent less than VMware's. Red Hat itself puts the savings at 66 percent. It all depends on the fine details of the comparisons. But it is also possible to go native and use the open-source versions of everything KVM. You get the functionality with zero payment to outside vendors, though you do need internal management staff.
Is VMware really worried about this? It has to be. Its business model calls for ever more complex code at substantial license prices, but this may not win the battle. There is likely to be a good-enough threshold that becomes the target point for savvy IT managers. The current versions appear to be close to that point, and with the focus of the cloud on cost effectiveness, KVM is now a strong alternative for the job.
With the KISS principle at work here, it's a judgment call whether raw KVM delivers enough net savings to be a better choice than, say, Red Hat. Many shops don't feel comfortable with handling peripheral virtualization on their own, for instance. But even at 40+ percent savings, Red Hat is in contention. Most IT managers are comfortable working with it, so that's not a barrier, and VMware's first-year capex is going to require a bit of explaining to the CFO.
The microserver alternative
There is, in fact, another horse in the race. Microservers were created as an alternative to virtualized server engines, and they're pretty cheap per engine. Even if they aren't virtualized, they run around $60,000 for 48 engines, compared with $5,000 for VMware plus around $6,000 for three years of support. Red Hat is even cheaper, and the cost of three years of support is around $2,100.
Looking forward, we'll see KVM on ARM Ltd. (Nasdaq: ARMHY; London: ARM) in the near future. It has already been released in the open-source Linux kernel for the ARM 64. Still a performance unknown, it could sway the race against microservers.
VMware's challenge in all this is figuring how to maintain relevance. Dropping the license fee and living off the support isn't an option, because the company needs cash for all the developers. Adding features to stay ahead of the competition has limited value, especially if the features use up resources and slow the VMs. Volume sales to the major CSPs are a nonstarter, because they have all rolled their own hypervisor stacks. And OpenStack is bringing even more competition in the open-source space.
It will be interesting to watch this evolve. VMware will fight back, but its current strategy -- adding complexity to maintain the lead -- may backfire by making the price too high. We may see a repeat of the Unix and Linux story.
Members, how do you see this race playing out?