The worldwide x86 server virtualisation market is expected to reach $5.6 billion in 2016, an increase of 5.7% from 2015, according to Gartner.
Despite the overall market increase, new software licences have declined for the first time since this market became mainstream more than a decade ago.
Growth is now being driven by maintenance revenue, which indicates a rapidly maturing software market segment.
The market remains dominated by VMware, but Microsoft has worked its way in as a mainstream contender for enterprise use.
There are also several niche players including Citrix, Oracle and Red Hat, in addition to an explosion of vendors in the domestic China market.
While server virtualisation remains the most common infrastructure platform for x86 server OS workloads in on-premises data centres, Gartner said new computing styles and approaches will be increasingly impact the market. This includes OS container-based virtualisation and cloud computing.
The trends are varying by organisation size more than ever before, with the market segment for those with larger IT budgets approaching saturation.
Companies with smaller IT budgets, however, expect a further decline in usage through to at least 2017, causing an overall decline in new spending for on-premises server virtualisation.
Organisations are increasing their usage of ‘physicalisation’, choosing to run servers without virtualisation software. More than 20% of these organisations expect to have less than one-third of their x86 server OSs virtualised by 2017 — twice the amount reported for 2015. However, the underlying rationales remain varied.
The rise of software-defined infrastructure and hyperconverged integrated systems are providing new options. This has put pressure on best-of-breed virtualisation vendors to add more out-of-the-box functionality and provide a better experience and faster time-to-value.
"The market has matured rapidly over the last few years,” said Gartner research director Michael Warrilow, “with many organisations having server virtualisation rates that exceed 75%, illustrating the high level of penetration.
"What was considered as the best approach to greater infrastructure agility only a few years ago is becoming challenged by an array of newer infrastructure choices.”