APAC virtualization market to be $1.35-bn by 2010

New Delhi

April 1, 2008

Virtualization software and services market in APAC is estimated to reach
$1.35 billion with CAGR of 42 percent by 2010, according to Springboard
Research, IT market research firm. Virtualization services is estimated to touch
$1 billion by 2010 and will form the major portion of this market as
organizations will spend two to three times more on services than on software.

According to the research, 50 percent of CIOs want to deploy virtualization
solutions over the next 18-24 months to address issues like low system capacity
utilization, poor performance and other challenges associated with managing
growing IT infrastructure. The report is based on a survey of CIOs from large
and mid-sized enterprises in Australia, China, India and Singapore.

“Our research indicates that virtualization, at least at the server level,
is becoming an imperative and that a growing number of companies will implement
virtualization at the server level in 2008,” said Michael Barnes, VP-Software
Research, Springboard Research. “The complex nature of engagements with
vendors and SIs while implementing virtualization solutions is a prime reason
for virtualization services taking a larger share of the market,” he added.

Growth challenges

Although some Asian CIOs understand the benefits of virtualization, many
organizations are unsure how to approach its implementation. Additionally, many
CIOs view virtualization technologies as immature and feel that implementing the
technology could introduce new management and security challenges.

Virtualization is also primarily viewed from a technical perspective and most
CIOs do not link virtualization to solving business problems.

“There is clearly a need for more customer education on the benefits of
virtualization — followed by education on different approaches to successfully
incorporating virtualization into the IT environment,” said Ravi Shekhar
Pandey, Senior Analyst, Springboard Research.

“Sharing case studies of successful deployments alongside direct linking of
virtualization with RoI and business benefits is a key imperative from the
vendor side,” Pandey added.

On the software side, VMWare is the APAC virtualization market leader with an
estimated 70 percent marketshare, while Microsoft, Parallels, Virtual Iron and
XenSource are other players with significant presence. IBM, HP, Dell and Sun
dominate the virtualization services market.

Australia and Korea lead the virtualization marketplace in APAC due to their
well-built infrastructure, while Taiwan, Hong Kong, China and India are high
growth potential markets.