Introduction
Not that long ago, running applications directly on physical servers — which often sat mostly idle — was typical in server rooms around the world. But within the span of a decade, use of server virtualization, which can drastically improve IT efficiency, became a standard industry practice.
Server virtualization adoption also grew thanks to additional benefits such as application isolation, greater workload portability, improved scalability, and high availability options. These advances ultimately helped businesses get more out of their hardware and “do more with less.”
Although in smaller numbers, many organizations seek similar gains by virtualizing other elements of IT, including storage, networks, desktops, applications, and more. But which forms of virtualization are most commonly used, which solutions and vendors are gaining popularity, and how will adoption grow in the future?
To find out, Spiceworks surveyed more than 530 IT decision makers in businesses across North America and Europe.
Key Findings
- Virtualization adoption grows beyond servers: Within the next two years, double digit growth is expected in the use of desktop, application, network, storage, and data virtualization.
- A shift from storage arrays to software-defined storage: 25% of businesses plan to use software-defined storage solutions instead of buying shared storage arrays.
- Virtual environments move to the cloud: Within the next two years, 45% of businesses are planning or considering moving their entire server virtualization environment to the cloud.
- Server hypervisor technology viewed as a commodity: Nearly a third of IT decision makers believe server hypervisor technology is a commodity.
Business Adoption of Virtualization Technologies
According to Spiceworks research, server virtualization is ubiquitous, used by 92% of businesses. However, other forms of virtualization have some catching up to do. Among emerging virtualization technologies, the most common is storage virtualization (also called software-defined storage) with a 40% adoption rate, followed by application virtualization at 39% and virtual desktop infrastructure (VDI) technology at 32%. Additionally, network virtualization (also called software-defined networking) and data virtualization each enjoy a 30% adoption rate.
Looking forward, Spiceworks research indicates more than half of businesses plan to use storage virtualization and application virtualization by 2021. In fact, application virtualization is expected to experience the most growth among virtualization technologies with adoption expected to grow from 39% today to 56% by 2021. We also expect double digit growth in the use of desktop, data, and network virtualization technologies within the next two years.
When comparing responses by company size, the data shows enterprises with more than 1,000 employees are adopting virtualization technologies at higher rates across the board. For example, compared to small businesses, twice as many enterprises have adopted application virtualization (60% of enterprises vs. 29% of small businesses) and desktop virtualization (50% of enterprises vs. 24% of small businesses).
2X as many enterprises have adopted application virtualization and desktop virtualization compared to small businesses
Looking ahead, enterprise adoption of virtualization technology is expected to grow significantly: by 2021, 75% of enterprises expect to use application virtualization and 69% expect to use desktop virtualization.
Storage Virtualization
Storage virtualization allows for greater control and flexibility with physical storage, helping companies do more with the resources they have. For these reasons and more, storage virtualization adoption is already relatively common, and it will soon become mainstream.
According to our findings, 40% of organizations currently use storage virtualization technology, and an additional 12% plan to within the next two years. Additionally, a quarter of businesses said they’ll use software-defined storage as a replacement for traditional SAN and NAS devices. But while many businesses agree that using software-defined-storage technology is a cost-effective way to achieve benefits similar to those provided by storage arrays, monetary savings aren’t the primary reason driving the shift.
Among businesses using or considering using software-defined storage, IT decision cited these top reasons for adoption:
- More flexibility with storage infrastructure (47%)
- Improved manageability of storage (46%)
- Improved storage performance (45%)
- Less hardware investment compared to alternatives (43%)
- Greater storage scalability (41%)
- Better fault tolerance (39%)
Among businesses using or considering storage virtualization, VMware vSAN is the most commonly used solution with a 34% adoption rate, followed by Microsoft Storage Spaces Direct (10%), HPE StoreVirtual VSA (10%), Starwind VSA (5%), and Red Hat Gluster (2%). Going forward, we expect the rankings to remain largely the same, as consideration rates fall in line with current rankings.
However, it should be noted HPE is phasing out the StoreVirtual VSA product, which won’t be sold after December 31, 2019, and reaches end of life three years later. In the future, current users will need to seek alternatives, including those from HPE.
Desktop Virtualization
According to Spiceworks research, 32% of businesses have deployed desktop virtualization technology, also referred to as virtual desktop infrastructure (VDI), and an additional 12% of businesses plan to adopt it by 2021. While this form of virtualization can enable IT efficiencies, VDI can also help organizations protect sensitive data and support users in an evolving workplace where many employees work remotely or using a variety of devices.
Among businesses using or considering desktop virtualization, the following benefits are considered the top motivators for purchasing among IT decision makers:
- More efficient use of computing resources (58%)
- Centralized management and support of client workspaces (57%)
- Supports a remote workforce (52%)
- Enables end user flexibility to work from any device (43%)
- Improves resiliency / disaster recovery strategy (41%)
- Increases control over sensitive data (40%)
- Reduces computing burden on end user devices (39%)
- Reduces total cost of ownership (39%)
Among businesses using or considering using virtual desktop technology, 61% currently use Microsoft Remote Desktop, making it the most popular VDI solution in the workplace, followed by Citrix Virtual Desktops (20%), and VMware Horizon View (14%). While Microsoft’s lead in VDI is large, both Citrix and VMware have the potential to narrow the gap within the next two years, with each contender enjoying double-digit consideration rates.
Looking at adoption trends by company size, enterprises and SMBs tend to gravitate towards different VDI solutions. For example, among businesses using or considering VDI technology, 22% of enterprises use VMware Horizon View, compared to 16% of mid-size businesses and 7% of small businesses. Additionally, 33% of enterprises use Citrix Virtual Desktops, compared to 19% of mid-size businesses and 14% of small businesses. However, Microsoft Remote Desktop bucks this trend, with 64% of mid-size companies and 62% of small companies using the product, compared to 47% of enterprises.
However, the biggest opportunity for VDI providers won’t be on-premises. Although current usage is in the single digits, many will shift to cloud-based solutions within the next two years. For example, among businesses using or considering VDI, 28% are considering the recently-launched Azure Windows Virtual Desktop, while 21% are considering VMware Horizon Cloud, and 10% are considering Amazon Workspaces within the next two years.
Network Virtualization
According to our research, 30% of businesses currently use network virtualization technology — also referred to as software-defined networking (SDN) — and an additional 14% plan to adopt it by 2021. To help explain the technology’s growing popularity, IT decision makers cited the following benefits as top reasons why organizations use or consider the technology:
- More flexibility with network configuration (51%)
- Improved management capabilities (48%)
- Ability to reconfigure networks without physical changes (46%)
- Improved security capabilities (45%)
- More control over network segmentation (39%)
- Cost savings (33%)
- Automation benefits (33%)
According to our data, the software-defined networking market is relatively fragmented, with no single dominant player breaking far away from the rest of the pack. Among businesses using or considering network virtualization technology, 18% have adopted VMware NSX, followed by Microsoft SDN at 11% and Cisco ACI at 8%. It’s also worth noting 13% of businesses are using “other” SDN providers, with respondents citing brands such as Ubiquiti UniFi, Cisco Meraki, and ZeroTier.
Looking forward, the most popular SDN solutions are expected to maintain their current positions: an additional 14% of businesses are considering adoption of VMware NSX and Microsoft SDN within the next two years, and 15% are considering adoption of Cisco ACI. Of note, Cisco ACI is more commonly used by enterprises (21%) compared to mid-size (8%) and small businesses (3%).
Server Virtualization
Nearly every business is using some form of server virtualization technology. According to our data, business adoption of server virtualization stands at 92% and will grow to 97% within the next two years. Additionally, businesses trust the technology to run the vast majority of services, including mission-critical ones. In our research, respondents indicated that 77% of on-premises server workloads are virtualized.
In a saturated virtualization market, nearly a third (31%) of IT decision makers believe server hypervisor technology is a commodity. However, there’s still some room for players such as VMware, Microsoft, and Citrix to compete on functionality going forward. For example, when evaluating server hypervisors, the most critical product attributes IT decision makers look for are consistent stability/reliability (86%), robust disaster recovery capabilities (63%), and advanced security features (40%).
Diving into the server virtualization features and functionality, Spiceworks data shows the most common advanced capabilities used in business include: high availability (58%), replication (57%), virtual volumes (51%), Live Migration/vMotion (50%), load balancing/resource distribution (50%), and failover clustering (46%).
As expected, larger organizations are more likely than SMBs to use advanced server virtualization capabilities. For example, nearly twice as many enterprises take advantage of quality of service functionality, integrations with public cloud services, and orchestration/automation features compared to SMBs.
While there are many server virtualization vendors, our research found the market for bare-metal server hypervisors is largely a two-horse race between VMware and Microsoft. Among businesses using or considering server virtualization, 68% use VMware vSphere and 60% use Microsoft Hyper-V.
Among vSphere users, 58% pay for the vSphere Essentials, Standard, or Enterprise edition, while 22% use the free version. And among Hyper-V users, 40% use the standalone version and 36% use the role-based version. Other players include Citrix Hypervisor (formerly XenServer) with a 10% adoption rate, followed by KVM (7%), Oracle VM Server (4%), Red Hat Virtualization (3%), and Proxmox VE (2%).
However, brand adoption varies by company size. For example, enterprises are much more likely to use hypervisors from Citrix, Oracle, and Red Hat than SMBs. On the flip side, SMBs are more likely to use KVM and the free version of vSphere.
It’s also worth noting that some organizations have deployed hypervisors from multiple vendors. For example, 27% of organizations run both Hyper-V and vSphere in their environments. Looking ahead, that number will likely grow and the gap between VMware and Microsoft may shrink. Spiceworks data indicates an additional 12% of businesses are considering adoption of VMware vSphere in the next two years, compared to 15% considering adoption of Microsoft Hyper-V.
In terms of what versions of Hyper-V and vSphere businesses are running, the results show many businesses are running outdated virtualization technology. For example, among vSphere users, 30% use vSphere ESXi 6.7, 47% use ESXi 6.5, and 24% use ESXi 6.0, which will reach its end of support on March 12, 2020. Additionally, nearly a third of businesses (31%) are running out-of-support versions of ESXi such as 5.5, 5.0/5.1, and 4.x or older. This is concerning because VMware does not release new security patches or bug fixes for these older hypervisors.
31% of businesses are running out-of-support versions of VMware vSphere ESXi
Among Hyper-V users, 27% use the Windows Server 2019 version, 60% use the Windows Server 2016 version, and 54% use the Windows Server 2012 R2 version. However, it’s concerning that 16% still use Hyper-V 2.0 (Windows Server 2008), which reaches end of support on January 14, 2020.
Server Hypervisor Customer Satisfaction
Spiceworks also examined how satisfied businesses are with the top server virtualization vendors by asking whether their solution meets or exceeds expectations across different attributes.
The results show Microsoft and VMware both received high customer satisfaction scores for consistent stability/reliability, which is the most important consideration factor to IT decision makers. However, paid versions of VMware vSphere (Essentials, Standard, Enterprise) edged out the competition in other areas, earning top customer satisfaction marks across attributes including robust disaster recovery capabilities, advanced security features, a simple management interface, comprehensive support for third-party integrations, and advanced automation capabilities.
Microsoft Hyper-V and the free version of VMware vSphere scored highly for offering the lowest total cost of ownership, but it should be noted that several free or open-source options weren’t included in our matrix due to low usage rates. Finally, Citrix Hypervisor narrowly scored the highest customer satisfaction rates for robust support for containers and tied with VMware’s paid products for seamless interoperability with cloud services.
However, there’s certainly room for improvement when it comes to integrations with cloud services and support for containers. This represents an opportunity for providers to differentiate themselves from the competition.
Alternatives to on-premises virtual machines
Even though server virtualization is ubiquitous in server rooms, organizations are actively exploring alternatives. For example, 18% of IT decision makers reported their organization is using or considering using containers instead of virtual machines for some use cases. In enterprises, that figure reaches 30%.
30% of enterprises are using or considering using containers instead of virtual machines
Additionally, while only 3% of organizations have migrated all virtualized server workloads to the cloud, we expect this to grow in the future. According to our survey, 12% of businesses have plans to move their entire on-premises virtual environment to the cloud within the next two years, and an additional 33% of businesses are considering it.
Opportunities for Technology Vendors
Now that we have a better understanding of the current state of virtualization technology and where it’s going in the future, what are the takeaways? With increasing adoption of many types of virtualization and a shift to software-defined and cloud-based technologies, the following tips can help tech vendors better connect with tech buyers.
Don’t assume tech buyers understand buzzwords
With emerging technology comes new terminology used to describe the latest and greatest. But while marketers live and breathe their products every day, IT buyers might be too busy to keep up with emerging technologies, specific offerings from providers, or the jargon used to describe them.
For example, when we asked IT decision makers about the following virtualization-related terms, many said they were not familiar with the following terms:
- Composable infrastructure (70%)
- Intent-based networking (65%)
- Multi-cloud (45%)
- Native public cloud (42%)
- Software-defined data center (37%)
Therefore, as tech vendors market their software-defined and cloud-based technologies, it’s important to explain unfamiliar concepts on a technical level, or these terms will get written off as buzzwords.
In other words, IT decision makers want tech vendors to speak to their organization’s needs without all the fluff. Technical content written for an IT audience can go a long way, especially if it details exactly what the products do, what benefits they offer, and how they solve specific business problems.
Capitalize on shifts towards new virtualization technologies
In the next two years, many businesses will adopt or investigate technologies such as desktop virtualization, software-defined networking and storage, and cloud-based virtualization. If tech vendors want to capitalize on this trend, they’ll need to understand who their customers are and how to effectively reach them.
For example, with usage of cloud-based virtual desktops expected to grow rapidly and nearly half of businesses planning or considering moving VMs to the cloud, many businesses will actively seek out migration guidance. You can bet that organizations weighing the pros and cons of moving virtual workloads to a public cloud will search online for advice or reach out to trusted advisors who can lead the way. There are also opportunities to help organizations upgrade their outdated hypervisors that reached end-of-support.
Tech vendors will have the most success by focusing on businesses who are actively researching and evaluating new virtualization technology or looking to upgrade their existing solutions. By identifying in-market businesses and targeting them with the right message at the right time, vendors can more effectively grow their business while simultaneously supporting the needs of IT decision makers.
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