Original URL: http://www.theregister.co.uk/2009/10/29/vmware_workstation7_fusion3/

VMware Workstation plays lucky 7

Virtualizing you know what

By Timothy Prickett Morgan

Posted in Virtualization, 29th October 2009 07:02 GMT

Server virtualization juggernaut VMware got its start on the desktop a decade ago, and it still makes a sizeable chunk of change virtualizing PCs and workstations so they can run multiple operating systems. In the wake of last week's Windows 7 blitz, VMware is kicking out its Workstation 7 hypervisor for x86 and x64 machines, as well as its companion for Apple Macs, Fusion 3.

Both Workstation and Fusion are what are known as type 2 or hosted hypervisors, which run atop a host environment and allow multiple guest operating systems to be put atop that host. With Workstation 7, VMware says that it has optimized performance when running atop 32-bit and 64-bit Windows 7 hosts, particularly interfacing with the 3D elements of the Aero interface for Windows 7 and DirectX 9.0c Shader Model 3 and OpenGL 2.1 for rendering 3G graphics. The hypervisor supports 32-bit or 64-bit operating systems and allows up to four virtual processors and 32 GB of memory to be allocated to each VM guest environment running on it.

Because Workstation sees heavy usage by programmers, the virtualization environment integrates with the SpringSource Tool Suite and the open source Eclipse integrated development environment for Java, C. and C++ coders. VMware ate SpringSource in August for $362m in cash, so such integration makes sense.

Workstation already integrates with Microsoft's Visual Studio tools to allow programmers to set up virtual environments across operating systems running in different virtual machines. This mimics a working n-tier configuration typical of programming environments in the real world and allows for record and play debugging of code on that virtual network. Now SpringSource and Eclipse IDEs will see VMs as virtual networks running applications for debugging.

VMware Workstation 7 supports over 200 different operating systems and costs $189 per PC. Customers with prior versions of the hypervisor can upgrade for $99.

In a related announcement, VMware also kicked out its Fusion 3 variant of Workstation, which is used to virtualize Apple Macs so they can run Windows operating systems atop Mac OS X on Intel-based machinery. VMware says that its "switch to Mac" feature - which allows for a physical Windows instance to be sucked onto a Mac running Fusion over Ethernet, wireless, or FireWire links - is more than twice as fast as the competition.

Fusion 3 supports four-way symmetric multiprocessing on the new iMac and Mac Pro machines, and VMware says that it also has lower overheads and up to twice as fast a resume time for VMs that have been suspended. As Workstation 7 has been optimized for Windows 7, Fusion 3 has been optimized for the latest "Snow Leopard" Mac OS X desktop operating system from Apple. This means it takes advantage of its 64-bit kernel and other 64-bit features to boost performance.

Fusion 3 allows all of those 3D features in Windows 7 to work even when it is hosted like a matryoshka doll inside of Fusion inside of Mac OS. It hypervisor costs $80 and upgrades from prior Fusion versions is available for $40 a pop.

Which brings up the next thing. Just how much money does VMware make from Workstation and Fusion? A VMware spokesperson declined to provide installed base, shipment, or revenue specifics on these desktop virtualization tools. Which leaves us all guessing.

In 2003, when the GSX Server and ESX Server products were just becoming viable, VMware had just over 5,000 customers and 1,500 of them were using its server products, which were launched in 2001. The bulk of VMware's customers were using Workstation in application development departments, and server products were used in testing. Very little of what VMware sold was used in a production environment in 2003, when - according to VMware's S-1 prospectus before it went public in the summer of 2007 - it had $31.2m in sales over the year.

In 2004, when GSX Server and ESX Server took off, along with desktop virtualization, VMware's license sales exploded to just under $178.9m, and services revenues came in at just under $40m. By 2005, license sales were up to $287m and services were at $100m. When Workstation 5 was launched in May 2005, VMware told me that it had 10,000 customers using GSX Server and ESX Server products, but that there were millions of licenses out there for Workstation.

Today, VMware has shipped a few million server hypervisors and probably still has millions of Workstation users. The number of programmers has not gone up radically in corporations, but the number of unvirtualized servers is still huge. One number can grow some, the other will grow lots.

A few years ago, the typical server cost just under $6,000 to give all the VMware goodies, but that price has come down remarkably thanks to competition from Microsoft and VMware. The ratio of desktop versus server license sales is therefore probably roughly the same as the price difference between the desktop and server hypervisors, given that the installed bases are more or less on the same magnitude now.

If you assume that the average server is being virtualized with vSphere 4.0 at around $2,000 (not including support, just the licenses) - and that the average price of Workstation and Fusion products comes out to around $150 - then the Workstation and Fusion products are probably a little more than half of VMware's license installed base among its 150,000 customers and maybe something on the order of 7.5 per cent of its license revenues in the third quarter ($240.3m), or about $18m.

There probably is not a lot of services drag along for either desktop product. If there are as many as 10 million Workstation and Fusion seats out there, the revenue stream could be as large as $50m each quarter. That's not a huge piece of the pie, but every penny counts and this could be a very profitable business too. ®