Is Oracle VM a Threat to VMware?

The simple answer is "no." And yet as I write this on November 15, 2007 VMware stock (NYSE:VMW) is trading at around $86 per share whereas the October 31 price was near $125, a drop of 31%. During that same period, the Dow dropped about 5% and Oracle dropped about 8%. On the day that Oracle demo'ed the new VM software, VMware stock (NASDAQ:ORCL) dropped 6% and Oracle stock gained 2%. Clearly I am among a minority in my opinion that this announcement will have limited impact on VMware.

We all know what VMware is, so what is Oracle VM (OVM)?

Quoting Oracle: "Oracle VM offers scalable, low-cost server virtualization that supports both Oracle and non-Oracle applications. Consisting of open source server software and an integrated Web browser-based management console, Oracle VM provides an easy-to-use graphical interface for creating and managing virtual server pools, running on x86 and x86-64-based systems, across an enterprise. Users can create and manage Virtual Machines (VMs) that exist on the same physical server but behave like independent physical servers. Each virtual machine created with Oracle VM has its own virtual CPUs, network interfaces, storage and operating system. With Oracle VM, users have an easy-to-use browser-based tool for creating, cloning, sharing, configuring, booting and migrating VMs."

You can download the host OS, Oracle VM Server 2.1 (534MB), the source for that (432 MB), and the Oracle VM Manager 2.1 (304MB). You also would download guest OS, Oracle Enterprise Linux 5 which is Oracle's distribution of Red Hat Enterprise Linux 5 (RHEL5) (5.1GB).

Why do I say that Oracle VM is not a threat? Oracle is carving out merely a restricted piece of the market. Points to consider:

• If you are a Microsoft shop or even if you have a few important Windows servers, you are not going to be interested in this product, you are going to stick with VMware. Oracle has not yet developed the drivers for Windows that make it efficient as a guest operating system. Again quoting the Oracle FAQ: "Will the performance of Microsoft Windows running on Oracle VM be similar to the performance of Enterprise Linux running on Oracle VM? No. Currently, Microsoft Windows runs significantly slower on Oracle VM than it does on native hardware. However, Oracle is developing paravirtualized Windows drivers that will substantially improve the performance of Windows on Oracle VM."
• Oracle VM is not an answer to the automation of VMware Infrastructure 3. OVM does not have a optimization features that reallocate virtual machines to different physical machines. OVM is not datacenter automation.
  
• Oracle's claim of 3x speed improvement over VMware is based on testing of their own products only. That said, such gains should also be possible with other Linux applications, and that is due to the way that Xen does virtualization. Xen takes advantage of Linux as the host and Linux as the guest.
• Although OVM is free, support is not: $499/yr for two cpu systems and $999/yr for unlimited cpu systems. And if you don't subscribe to support, you do not get patches.
  

What Oracle is doing is providing their own customers with an attractive but incomplete alternative to VMware. This is a way for enterprises with little or no experience to tiptoe into virtualization.