With the launch of Parallels Server Bare Metal, Parallels is expanding its value proposition in the crowded virtualization marketplace. But how is its approach different from other virtualization vendors such as Citrix, Microsoft and VMware?

First, Parallels offers a differentiated approach to virtualization that includes both hardware virtualization with Parallels Server Bare Metal and OS virtualization with Parallels Virtuozzo Containers. When the OS environment is heterogeneous, Parallels Server Bare Metal provides flexibility for hosting workloads with different operating systems on the same physical server. This approach is similar to Citrix XenServer, Microsoft Hyper-V, Oracle VM and VMware vSphere. However when the OS environment is homogeneous, Parallels provides capabilities to consolidate workloads with much lower virtualization overhead and much higher consolidation ratios. This is particularly useful for desktop virtualization.

Second, Parallels is clearly positioning itself for cloud enablement. Changes in messaging from "Automation and virtualization leader" to "Cloud enablement leader" clearly speak to that. And while other vendors are getting ready for cloud adoption, Parallels is already there with major market and mind share from service providers. Starting from its position of strength, Parallels can now go to all its partners using Parallels Virtuozzo Containers and help them expand their value proposition to customers with the addition of Parallels Server Bare Metal.

Finally, Parallels provides Parallels Virtual Automation for comprehensive management of both physical and virtual environments. Because of its strong expertise in enabling services providers, these capabilities push self-service and automation to levels that dramatically reduce the cost of implementing and managing virtual infrastructure.

In the last six years, leading vendors made significant investments to capitalize on opportunities presented by virtualization technologies:

• EMC acquired VMware in 2003 for $635 million
• Citrix acquired XenSource in 2007 for $500 million
• Red Hat acquired Qumranet in 2008 for $107 million
• Oracle acquired Virtual Iron in 2009 and is finalizing acquisition of Sun Microsystems

Now the big question is, who else wants to have a strong play in the virtualization and the cloud space?

Regardless of what happens, Lanamark Suite will enable the IT channel to design and deliver desktop and server virtualization solutions across all the leading virtualization platforms.

Lanamark today announced a partnership with Avnet Technology Solutions, a leading distributor of enterprise computing products, software and services with locations in more than 30 countries. The partnership will enable value-added resellers, system integrators and system builders working with Avnet Technology Solutions to use Lanamark Suite to accelerate design and delivery of desktop virtualisation, server virtualisation and storage solutions to enterprises in EMEA.

The partnership between Avnet Technology Solutions and Lanamark allows IT solution providers to offer real options to customers across virtualization and hardware platforms, rather than limiting them to a fixed combination. Now VARs, system integrators and consultants can mix-and-match:

• Software from vendors such as Citrix, Microsoft, Oracle, Parallels, Quest and VMware
• Hardware from vendors such as EMC, HP, Hitachi, IBM, Fujitsu, IGEL, NetApp, Sun and Wyse

By doing so, solution providers can build solutions that are best for their customers and then purchase all the key components of these solutions from Avnet, all while shortening sales cycles and maintaining control of sales and services opportunities.

Less than a month after acquiring Sun Microsystems, Oracle announced that it is going to acquire Virtual Iron. Why would Oracle want to buy Virtual Iron if it already has Oracle VM and nearly completed Sun xVM Server? Here are some potential drivers for the acquisition:

1. Virtual Iron has a mature, field-validated server virtualization offering that includes a comprehensive set of virtual infrastructure management applications.
2. Virtual Iron is one of the best known brands in the virtualization space.
3. Oracle VM probably does not yet have a critical mass of customers and mindshare. Meanwhile Sun xVM Server is not generally available.
4. Virtual Iron applications are developed in Java. This will make it easier for Oracle to integrate and maintain Virtual Iron technology, especially after acquiring Sun Microsystems.
5. By acquiring Virtual Iron, Oracle is also going to cut off other vendors such as Novell from entering into direct competition with Oracle in the virtualization space.

There is no question that Oracle could have continued to increase its marketshare by building Oracle VM and Sun xVM Server. However with Virtual Iron under its wing, Oracle is able to accelerate its entry into the virtualization space with a credible and proven virtualization offering.

Lanamark Suite already supports server virtualization analysis, planning and design for Virtual Iron.

As IBM walks away from its acquisition of Sun Microsystems, it is clear that Cisco Systems and Hewlett-Packard have a renewed opportunity to pursue Sun Microsystems. There are several factors favoring these vendors:

1. The Sun Microsystems Board of Directors is probably frustrated in dealing with IBM and would welcome another more aggressive suitor.

2. The last offer Sun Microsystems was willing to explore was $9.55 per share or approximately $7 billion. In other words, both vendors know approximately how much the acquisition would cost.

3. Chances of anti-trust issues would be minimal compared to IBM.

Would HP bid on Sun Microsystems or is Cisco going to strike first?

While most attention has been on IBM and its pursuit of Sun Microsystems, what would HP gain by competing with IBM to acquire Sun? Let's explore the various what-if scenarios for HP and IBM:

IBM acquires Sun Microsystems

Benefits to HP

• No need to worry about Cisco acquiring Sun and attacking core HP server and storage businesses.
• No need to compete with Sun directly.

Downsides for HP

• IBM owning 65 percent of the $17 billion UNIX server market.
• IBM increasing its strength in server, storage and service businesses.

HP acquires Sun Microsystems

Benefits to HP

• No need to worry about Cisco acquiring Sun and attacking core HP server and storage businesses.
• Expanded software and developer tools portfolio that could help HP compete more effectively with IBM.
• MySQL to help HP enter the database market and take on DB2, Oracle and SQL Server.
• Dominant position in the UNIX server market against IBM.

Downsides for HP

• Premium on acquiring Sun Microsystems, especially in light of competition from IBM.
• Consolidation with Sun server and storage businesses due to overlap.

Neither HP nor IBM acquires Sun Microsystems

This could be detrimental to both HP and IBM because Sun would most likely become an acquisition target for Cisco Systems. And if it falls into the hands of Cisco, then Cisco will be in a strong position to attack core server and storage businesses of both companies. IBM has the most to lose if Sun Microsystems falls into the hands of either Cisco or HP because in both cases, it would be facing a stronger competitor across its server, storage, software, database and other core businesses. Hence pursuit of Sun Microsystems is actually a defensive strategy for IBM in an attempt to protect and bolster its core businesses against both Cisco and HP.

If IBM efforts fail due to anti-trust issues, then this may be the catalyst for HP to bid on Sun Microsystems. Of course HP may go after Sun proactively but given its slightly more conservative $10.246 billion position in cash and cash equivalents compared to $12.906 billion for IBM, HP may sit this one out. Furthermore, HP may want to conserve its cash resources and go after Egenera after IBM spends its cash on Sun Microsystems.

Ultimately Cisco is in the best financial position to go after Sun Microsystems and block both HP and IBM. Cisco has $29.531 billion in cash and cash equivalents as of December 31, 2008 so as long as it is willing to bid north of $8 billion for Sun, it may put both HP and IBM out of contention.

Regardless of what happens, Lanamark software already supports data center analysis and design services with servers and storage from Dell, HP, IBM and Sun, and virtualization platforms from Citrix, Microsoft, Parallels, Virtual Iron and VMware. Support for Cisco UCS is coming in 2009Q2.

On March 16, 2009 Cisco unvealed its Unified Computing System, positioning itself to broaden its reach across the data center beyond network infrastructure. The Cisco Unified Computing System unites computing, network, storage and virtualization resources in the data center, making IT infrastructure more efficient and less complex.

Cisco's move is quite brilliant - instead of competing head-on with Dell, HP and IBM in the saturated server and storage market, Cisco is offering a highly integrated blade platform which would allow it to offer all data center components in a unified form factor. This approach is highly differentiated and will certainly cause Dell, HP and IBM to consider defensive strategies.

IBM is already pursuing an acquisition with Sun Microsystems in a possible attempt to prevent Cisco Systems from gaining a complete stack and attacking its server, storage and other core businesses. IBM acquisition of Sun Microsystems would actually benefit Dell and HP because it would preclude Cisco Systems from competing with their core businesses since both vendors are already competing successfully with IBM on these fronts. But if Sun Microsystems is acquired by Cisco Systems, then how should Dell, HP and IBM respond?

One possible approach would be to acquire Egenera which provides the closest possible alternative to the Cisco Unified Computing System. Dell already has an OEM agreement with Egenera so it would be no surprise if Dell fires the first shot and pursues an acqusition. But with $12.906 billion and $10.246 billion in cash and cash equivalents IBM and HP have respectively, both companies are in a stronger financial position to go after Egenera than Dell.

Regardless of what happens, Lanamark software already supports data center analysis and design services with servers and storage from Dell, HP, IBM and Sun, and virtualization platforms from Citrix, Microsoft, Parallels, Virtual Iron and VMware. Support for Cisco UCS is coming in 2009Q2.

Two days after Cisco unveiled its Cisco Unified Computing System, the Sun Microsystems stock jumps more than 75% and there is a rumor that IBM is bidding to acquire Sun. The article on Forbes provides some context around why Sun is a good fit for IBM but there is also something interesting about the Cisco Unified Computing System.

Sun Microsystems is absent from Cisco's launch announcement but did it have a hand in building the Cisco Unified Computing System? By taking a close look at the two images below, it's evident that there are design similarities between the Cisco UCS blade platform and the servers designed by Sun Microsystems:

 

Could Sun Microsystems be unoficially behind the Cisco Unified Computing System and is Cisco possibly competing with IBM to acquire Sun Microsystems?

Although there has been speculation that Cisco is getting ready to acquire VMware or possibly its parent company EMC, Sun Microsystems is probably a more interesting acquisition target for Cisco because Sun has a complete stack which includes servers, storage and even thin clients. Both companies have headquarters in California and would probably have a very good culture fit. With Sun Microsystems under its wing, Cisco would have a broad portfolio of data center solutions for enterprises of all sizes and put it in direct competition with Dell, HP and IBM.

In contrast, IBM has a significant amount of overlap with Sun and could face anti-trust scruitiny because the merger would give IBM 65 percent of the $17 billion UNIX server market. As of December 31, 2008 IBM had $12.907 billion in cash, cash equivalents and short-term investments compared to $29.531 billion for Cisco Systems. Hence IBM is also in a more constrained cash position to acquire Sun Microsystems which has a market capitalization of $6.03 billion. Should a bidding war errupt, the valuation of Sun Microsystems could jump by another 50%.

Regardless of what happens, Lanamark software already supports data center analysis and design services with servers and storage from Dell, HP, IBM and Sun, and virtualization platforms from Citrix, Microsoft, Parallels, Virtual Iron and VMware.