Red Hat buys Qumranet, adds gasoline to the spreading VDI bonfire

Open-source giant Red Hat has upped the ante in the PC desktop virtualization market with its acquisition of Qumranet, Inc. in a $107-million deal announced this week.

This acquisition clearly ups the ante in the race for Desktop Virtualization Infrastructure (VDI) solutions. I used to call VDI "desktop as a service (DaaS)," and still think that works pretty well. Anyay, the Red Hat purchase comes on the heels of HP's major virtualization push announced this week, which includes a large VDI component. [See a sponsored podcast on HP's virtualization solutions.]

The Red Hat purchase of Sunnyvale, Calif.-based Qumranet's kernel-based virtual machine (KVM) platform and SolidICE VDI solution is targeted at enterprise customers seeking to cut the total cost of providing applications, web access and runtime features to the client edge.

The acquisition of Qumranet gives the Raleigh, N.C.-based Red Hat a more comprehensive portfolio of virtualization offerings, including:

• An open-source operating system with built-in virtualization.
  
  
• An embedded hypervisor that supports major operating systems.
  
  
• A consistent management platform for both virtual and physical systems.
  
  
• A cloud and grid management solution.
  
  
• Advanced, high-speed inter-application messaging.
  
  
• An integrated security infrastructure.

SolidICE debuted in April, just weeks before Citrix unveiled its updated XenDesktop, putting Qumranet -- and now Red Hat -- head-to-head with Citrix and VMWare in the desktop virtualization arena. Microsoft may well take is forthcoming Hyper-V in a VDI direction, but for now seems content on partnering with Citrix on VDI. Sun Microsystems should own this market, but opted to hand over Java to the world and buy a tape drive company instead.

SolidICE is a high-performance, scalable virtualization solution built specifically for desktops, and not, Red Hat says, as a retrofit from server virtualization (slap!). It is based on the Simple Protocol for Independent Computing Environments (SPICE) and enables a Windows or Linux desktop to run in a virtual machine hosted on a central server or datacenter.

Virtualization has been around for decades, mostly on mainframes. It's foray into the desktop market was originally hampered by reliability and security issues. However, recent technological advances have ramped up interest and given virtualization a new head of steam. Such vendors as HP are seemingly confident that the performance issues are no longer an inhibitor, just as the economic drivers for virtualization (like energy conservation) are mounting fast.

Red Hat says that it doesn't expect the acquisition to contribute any substantial to its bottom line in the fiscal year that ends February 29, 2009, but after that the company is looking at $20 million in added revenue the following year.

In a nutshell, Qumranet and VDI fit Red Hat to a "T" -- with the service and maintance of centralized server-based clients just gravy on the already robust Red Hat infrastructure support business. VDI allows Red Hat to take its model to the PC, without leaving the datacenter. And it allows the promulagation of Linux for the client OS in much more expedient fashion than taking on Redmond on the desktop.

As I told NewsFactor Network, the market for VDI could be in store for a large growth spurt. VDI simply solves too many problems while providing very little disruption for end users to be ignored.

VDI, somewhat ironically, may also work well for market mover Microsoft as it seeks to slow the momentum to outright web-based and OSS/LAMP-supported applications and services for large businesses. Microsoft must realize that enterprises have had it with the high cost of maintaining and managing the traditional Windows OS in all its client-side permutations.

Not even a $300 million ad campaign for Vista can stop the addition and subtraction that spells this fact out. The math simply does not lie. Help desk costs to fix user config-type and malware issues are killing IT budgets.

Yet (just in time!) VDI allows Microsoft to keep the apps as Windows apps, retains the desktop OS license fees -- even if they are virtualized and server-based -- and VDI on Windows keeps developers and ISVs writing new and updating old apps to run on ... Windows. VDI allows converting client-server apps into Windows Server apps, without turning them into web apps.

Essentially, at the same time, virtualized and server-based VDI delivery of Windows apps and Windows desktop functionality allows enterprises to cut total costs, reuse aging desktop hardware, streamline updates and migrations, and slash security and privacy/control concerns (by maintaining management at the datacenter).

Help desks can actually be pared back, folks. Sorry, Ashish. Data can be kept safe on servers, not out in the strange world of lost hard drives and corporate espionage. Indeed, the U.S. Dept. of Defense (DoD) and other three-acronym spy agencies use VDI extensively. Nothing on the client but chips and dips. If you can do it there, you can do it anywhere.

Now, as Red Hat (and it's partner IBM?) seek to enter the VDI space aggressively and perhaps add Linux as the spolier runtime, Microsoft will need to accelerate its VDI initiatives. I expect MSFT to become the leader in VDI (perhaps via major acquisitions), as a hedge against Google, Red Hat, FOSS, the web, compute clouds, Amazon, IBM, and the far too high cost of traditional Windows clients.

Speaking of IBM, VDI offers Big Blue a way to play to all its global strengths -- infrastructure and services (green IT) -- while moving back into the client solutions (and end-to-end) value business in a potentially Big, Big, way. There's no reason why HP and IBM won't be huge beneficiaries of VDI, even as Microsoft makes it easier for them based on its own need to move quickly in this direction.

Here's a dark horse thought: If you can inject search- and web-based ads into web/SaaS apps, why could you not inject them into VDI-delivered apps? There could well be an additional business model of VDI-delivered desktops and apps supported by targeted ads. Telcos, cable providers, and service providers might (if the were smart) give away the PC/MID hardware, include the VDI/DaaS as part of triple-play connection or premium service fees, and monetize it all through relevant ads embedded intelligently in virtualized apps delivery. Nawwww!

Trust me, keep an eye on VDI, it has the potential to rock the IT market every way as much as Google/Yahoo/Amazon/SalesForce.com/SaaS -- only this trend hits the enterprise directly and fully. Incidentally, cloud computing as a private enterprise endeavor hugely supports the viability and economic rationale for VDI.

It's nice when IT megatrends align so well.

Interview: HP's virtualization services honcho John Bennett on 'rethinking virtualization'

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Hewlett-Packard announced a series of wide-ranging virtualization products, services and initiatives on Sept. 2. The drive indicates a global and long-term surge by HP on managing solutions for virtualization, but in the context of business outcomes and in a management framework that includes larger IT transformation strategies.

I conducted an earlier panel discussion on the HP announcements and vision, but also decided to go the top and interview the visionary behind the virtualization vision, John Bennett, the worldwide director of HP's data center transformation solutions and also the HP Technology Solutions Group (TSG) lead for virtualization.

Here are some excerpts from our chat:

We see large numbers of customers, certainly well over half, who have actively deployed virtualization projects. We seem to be at a tipping point in terms of everyone doing it, wanting to do it, or wanting to do even more. ... We see virtualization being driven more as tactical or specific types of IT projects.

It's not uncommon to see customers starting out, either to just reduce costs, to improve the efficiency in utilization of the assets they have, or using virtualization to address the issues they might have with energy cost, energy capacity or sometimes even space capacity in the data center. But, it's very much focused around IT projects and IT benefits.

The interesting thing is that as customers get engaged in these projects, their eyes start to open up in terms of what else they can do with virtualization. For customers who've already done some virtualization work, they realize their interesting manageability and flexibility options for IT. "I can provision servers or server assets more quickly. I can be a little more responsive to the needs of the business. I can do things a little more quickly than I could before." And, those clearly have benefits to IT with the right value to the business.

Then, they start to see that there are interesting benefits around availability, being able to reduce or eliminate planned downtime, and also to respond much more quickly and expeditiously to unplanned downtime. That then lends itself to the conversation around disaster recovery, and into business continuity, if not continuous computing and disaster tolerance.

It's a very interesting evolution of things with increasing value to the business, but it's very much stepwise, and today tends to be focused around IT benefits. We think that's kind of missing the opportunity. ... The real business value to virtualization comes in many other areas that are much more critically important to the business.

One of the first is having an IT organization that is able to respond to dynamically changing needs in real-time, increasing demands for particular applications or business services, being able to throw additional capacity very quickly where it's needed, whether that's driven by seasonal factors or whether it's driven by just systemic growth in the business.

We see people looking at virtualization to improve the organization's ability to roll out new applications in business services much more quickly. We also see that they're gaining some real value in terms of agility and flexibility in having an IT organization that can be highly responsive to whatever is going on in the business, short term and long term.

Yes, we see both pitfalls, i.e., problems that arise from not taking a comprehensive approach, and we see missed opportunities, which is probably the bigger loss for an organization. They could see what the potential of virtualization was, but they weren't able to realize it, because their implementation path didn't take into account everything they had to in order to be successful.

This is where we introduce the idea of rethinking virtualization, and we describe it as rethinking virtualization in business terms. It means looking at maximizing your business impact first by taking a business view of virtualization. Then, it maximizes the IT impact by taking a comprehensive view of virtualization in the data center. Then, it maximizes the value to the organization by leveraging virtualization for client implementations, where it makes sense.

But, it's always driven from a business perspective -- what is the benefit to the business, both quantitative and qualitative -- and then drilling down. ... I want to be able to drill down from the business processes and the business service management and automation tools into the infrastructure management, which in turn drills down into the infrastructure itself.

Is the infrastructure designed to be run and operated in a virtualized environment? Is it designed to be managed from an energy control point of view for example? Is it designed to be able to move virtual resources from one physical server to another, without requiring an army of people?

Part of the onus is on HP in this case to make sure that we're integrating and implementing support for virtualization into all of the components in the data center, so that it works and we can take advantage of it. But, it's up to the customer also to take this business and data center view of virtualization and look at it from an integration point of view.

If you do virtualization as point projects, what we've seen is that you end up with management tools and processes that are outside of the domain of the historical investments you've made. ... We see virtual environments that are disconnected from the insight and controls and governance and policy procedures put in for IT. This means that if something happens at a business-services level, you don't quite know how to go about fixing it, because you can't locate it.

That's why you really want to take this integrated view from a business-service's point of view, from an infrastructure and infrastructure management point of view, and also in terms of your client architectures.

Enterprises can lower the cost of IT operations implicitly by reducing the complexity of it and explicitly by having very standardized and simple procedures covering virtual and physical resources, which in conjunction with the other cost savings, frees up people to work on other projects and activities. Those all also contribute to reduce costs for the business, although they are secondary effects in many cases.

We see customers being able to improve the quality of service. They're able to virtually eliminate unplanned downtime, especially where it's associated with the base hardware or with the operating environments themselves. They're able to reduce unplanned downtime, because if you have an incident, you are not stuck to a particular server and trying to get it back up and running. You can restart the image on another device, on another virtual machine, restore those services, and then you have the time to deal with the diagnosis and repair at your convenience. It's a much saner environment for IT.

We see a large number of customers spending less than 30 percent of their IT budget on business priorities, and growth initiatives, and 70 percent or more on management and maintenance. With virtualization and with these broader transformational initiative, you can really flip the ratio around.

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Read a full transcript of the discussion.

HP experts portray IT transformation vision, explain new wave of virtualization products and services

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Read a full transcript of the discussion.

Virtualization has been gaining attention and adherents faster than ever, but the context of virtualization to business outcomes has been sketchy. Hewlett-Packard on Sept. 2 announced a series of products and services designed to place virtualization into a business and economic framework, one that helps enterprises flexibly embrace virtualization in the content of IT transformation.

The goal is to use many virtualization products and attain the needed professional services in a way that optimizes the outcomes and paybacks from virtualization activities, to make them related and managed holistically over an IT transformation lifecycle. While much of virtualization has focused on hardware reduction through higher utilization and more efficient platforms, virtualization is at a larger tipping point. The technologies and techniques are extending deeper into storage, applications, desktops, and even allowing enterprises to experiment with cloud computing benefits and efficiencies.

Virtualization needs to play well with itself at its various stages of use, across a variety of platforms and vendors, and it needs to play well too with the physical IT assets and resources. In a sense, virtualization is taking the need for managing and exploiting heterogeneity to an even higher level, with more dynamic and complex elements. It's a clarion call for management in total -- but with huge potential paybacks in terms of lower costs, greater agility, and improved security and control.

HP is well suited to pounce on the opportunity for bringing the variety of virtualization advances into cohesion, with management and risk reduction as the fore-thought, not the after-thought. So it's not surprising that HP on Sept. 2 unleashed a substantial set of announcements around virtualization -- spanning hardware, management, software, alliances, professional services ... and above all, vision.

HP is proposing that virtualization be re-thought in business terms and within a context of larger IT transformation undertakings, such as data center consolidation, application modernization, IT shared services, cloud computing, SOA, and next generation data center architectures. Virtualization is becoming ingrained across IT.

To better understand the new role and return for virtualization, how HP approaches the issues, and to gain more details on the Sept. 2 news, BriefingsDirect conducted a panel discussion with Greg Banfield, consulting manager for the HP Consulting and Integration (C&I) Group infrastructure practice; Dionne Morgan, worldwide marketing manager for HP’s Technology Services Group (TSG), and Tom Norton, worldwide practice lead for Microsoft Services at HP. Our podcast is moderated by me, Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

What’s interesting about virtualization is that, as companies have started to work with virtualization, the easy assumption is that you are really reducing the numbers of servers. But, as you expand your knowledge and your experience with virtualization, you start looking at comprehensive components in your environment or your infrastructure.

You start understanding what storage has to do with virtualization. You look at the impact of networks, when you start doing consolidation in virtualization. You start understanding a little bit more about security, for example.

Also, virtualization, in and of itself, is really allowing you to consolidate the sheer number of servers, but you still have the idea that each of those virtual servers needs to be managed. So, you get a better view about the overall impact of device management, as well as virtual machine management.

What’s interesting about this is that when you get into a virtualized environment, there's a need to understand the heartbeat of the virtualized environment and understand what’s going on at the hardware level. As you grow up from there with the virtualized machines, you have to understand how the virtual machines themselves are performing, and then there's got to be an understanding of how the actual applications are performing within that virtual machine.

So, management and virtual machine management, overall a comprehensive approach to management, is critical to being successful.

One of the key [benefits] areas is cost reduction. Virtualization can help with major cost savings, and that can include savings in terms of the amount of hardware they purchase, the amount of floor space that’s utilized, the cost of power and cooling. So, it improves the energy efficiency of the environment, as well as just the cost of managing the overall environment.

A lot of customers look to virtualization to help reduce their cost and optimize how they manage the environment. Also, when you optimize the management of the environment, that can also help you accelerate business growth. In addition to cost reduction, customers are also beginning to see value in having more flexibility and agility to address the business demand.

You have this increased agility or ability to accelerate growth. It also helps to mitigate risk, so it’s helping improve the up-time of the environment. It helps address disaster recovery, and business continuity. In general, you can summarize the business outcomes in three areas: cost reduction, risk mitigation, and accelerated business growth.

Strategy is becoming even more important. Our customers are very aware, as everyone else is now, that they have many options available to them as far as virtualization, not only from a perspective of what to virtualize in their environment, but also from a number of partners and technology suppliers who have different views or different technologies to support virtualization.

Our customers, from a strategy and design perspective, have looked to us to provide some guidance that says "How can I get an idea of the net effect that virtualization can have in my environment? How can I present that and gain that experience, but at the same time understand my long- term view of where I want to go with virtualization, because there is so much available and there are so many different options? How do I make a logical and sensible first attempt at virtualization, where I can derive some business value quickly, but also match that up against strategy for a long-term vision?"

What we are trying to look for is taking the complexity out of an introduction to virtualization. We're trying to take the complexity out of the long-term vision and planning and give the customers an idea of what their journey looks like, rapidly introduce it, but in the right direction, so they are following their overall vision in gaining their overall business value.

... We assess what’s happening in the organization from a people, a process, and a technology perspective. We benchmark against what’s happening in the industry, making recommendations on where a customer can actually improve, on some of those processes to improve efficiency, and to improve on the service level they are providing to the business. We also assist with the implementation of some of those process improvements. If you look at this from a full lifecycle perspective, HP provides services to assist with everything from strategy, to design, to transition, to the ongoing operations and continual improvement.

Listen to the podcast. Download the podcast. Find it on iTunes/iPod. Sponsor: Hewlett-Packard.

Read a full transcript of the discussion.