"Microsoft has been playing catch-up to VMware in the virtualisation space for a decade and will continue to play catch-up as we continue to advance... significantly."
Competition in business is nothing new, and when VMware chief executive Pat Gelsinger responded to a question about the firm's rivals during a press conference at its VMworld event in Barcelona, the reaction was far from tepid.
But while VMware is keen to hail itself as the king of virtualisation, is the channel so cocksure about the firm's trajectory, and what impact does the wrangling for the top spot have on its partners and customers?
VMware has more than 50,000 channel partners globally, and in its most recent financial results recorded 22 per cent year-on-year growth in its second quarter ending 30 June 2012, taking its revenue to $1.12bn (£753m). It claims that 80 per cent of virtualised machines (VMs) run on its technology, and Gartner ranked the firm as its highest "leader" in its Magic Quadrant for server virtualisation infrastructures in June this year.
However, occupying the same box in Gartner's Magic Quadrant - albeit lower and to the left - are Microsoft and Citrix.
Microsoft's UK Windows Server product manager Wayne Meyer denied that the vendor is playing catch-up to VMware, and poked holes in VMware's scalability.
He said: "There have been virtualisation products since 1964, it is nothing new. We have great scalability; VMware has 3,000 VMs per cluster, at Microsoft, we have 8,000. In terms of hard discs created, we do 64TB in a virtual disc, whereas VMware only does 2TB."
Meyer claimed Microsoft also trumps its larger rival on price.
"Customers are always wise, and they look at costs. It is about the value we can bring to the business, and what it costs to deploy it. We have the right tools and people, and [customers] choose us to save on the bottom line; we have seen that," he said.
Despite the price advantages Microsoft claims to have over its rival, VMware was doing everything it could to woo the 8,000 partners and customers who attended VMworld.
The firm is lowering the deal size threshold from $10,000 to $6,000 for its SMB partners, which it defines as companies with up to 1,000 users. It claims the incentive will enable resellers to register more deals, meaning they can take advantage of its GoPro rebates incentive, which was announced earlier in the year, and sees VARS reimbursed up to 20 per cent for sales to new accounts.
Additionally, for its larger customers, it launched its Enterprise Purchasing Programme (EPP), which is designed to give greater flexibility in selling its enterprise offerings. The EPP sits between its Volume Purchasing Programme and its Enterprise Licensing Agreement, and is targeted at deals between $200,000 and $600,000 over a three-year period.
Paul Casey, practice leader in cloud, virtualisation and automation at Computacenter, which partners with Microsoft, VMware and Citrix, said Microsoft's offerings can be beneficial for those sectors looking to cut costs.
"Microsoft is seeing traction in the SMB space. An area where we may see success for them is in local governments with huge cost pressures," he said.
VAR Softcat's solutions director Sam Routledge said education is another sector in which Microsoft can excel.
"There are some scenarios, in education, for example, where there are such good discounts on Microsoft. Sometimes VMware is not as generous in this scenario and this is where Hyper-V makes more sense," he added.
Casey claimed that Microsoft's technology matches VMware's in terms of its features.
"Feature for feature, both [technology offerings] are very strong, but it is hard for Microsoft because the accounts it wants to take it out to are already VMware house accounts," he said.
"Microsoft has talked about being strong in this [virtualisation] space for a long time now, but we have never seen them have a big impact in the market; you have to question how serious they are about competing in VMware's space.
"From an independent view, Hyper-V is strong, but customers do not look at it and think that technically they should swap out. They think they have signed an enterprise agreement and need to get the value from it, so they may as well use it."
On its website, VMware has refuted what it labels "Microsoft marketing fluff", suggesting its technology is incompatible with VMware's. On its Get The Facts page, it dismisses the claims as "hyperbole".
It aims to dispel the myths of incompatibility by claiming that VMware is supported as part of Microsoft's Server Virtualisation Validation Programme. It adds that Exchange 2010 supports its High-Availability Dynamic Resource Scheduling, meaning companies can virtualise Microsoft applications on VMware.
Speaking at VMworld Europe, VMware executives were keen to stress the company's position as a market leader. Its head of channel, Ed Dolman, claimed it keeps an eye on the competition, but does not answer to them.
He said: "We would never take competition lightly, especially not from vendors such as Microsoft.
"Competition is healthy, and there is no way we would rest on our laurels. But just look at [our] explosive growth; it shows the demand from customers to work with us is strong. Our announcements and innovations are not a response to anybody."
Mark Leake, the vendor's director of product marketing, added: "You see new [vendors] coming in and advancing their agenda with new releases, and that is great, but they are just playing catch-up.
"We have a major release every year, and continue to do that, and this keeps us ahead of the competition. We keep setting the bar high.
"Microsoft is a major company, and certainly a competitor to take into account. It has its agenda, and good luck to it. It does not impact on us as we are a step ahead. It has a legacy and other operating systems to support... but I believe we have a more open approach."
But it is not just Microsoft that is getting up VMware's nose, with Computacenter's Casey adding that the firm is struggling to fight off Citrix in the desktop space.
Citrix claims its technology is used in 260,000 organisations globally, as well as touching 75 per cent of internet users each day. The firm has about 10,000 partners in 100 countries.
Kevin Bland, Citrix's UK channel director, said virtualising desktops is the company's heritage.
"Virtualisation is just a way of describing something, in the same way that cloud is. We have been doing it for years, but if people need the word ‘virtualisation' in front of it in order to understand, that is a good thing," he added. We do not see ourselves as having entered the [space], we have always been there, but only recently has the branding ‘virtualisation' come about, and we have been happy to go with that."
Although having a growing number of vendors operating in the virtualisation space can cause competition at the top, Routledge added that from a channel perspective, it can only be a good thing.
The drive for innovation and competing price points are driven by competition, making end users' lives easier, he said, which has a positive impact on the channel as a whole.
"I think all the vendors can exist together, and competition is a really good thing because we are simply driven by the needs of our customers," he concluded.
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