Posted by Srinivas Krishnamurti
Director of Product Management and Market Development

As we close out 2007, I wanted to take a few moments to jot
down some thoughts on virtual appliances in terms of accomplishments in 2007
and challenges we need to overcome in 2008.

2007 YiR

A virtual appliance as a software distribution and
management paradigm is relatively new. VMware first talked about this paradigm in the context of launching the
VMware Technology Network in June 2005. Six
vendors (BEA, Oracle, RedHat, Novell, IBM and Spike Source) pre-installed and
pre-configured their applications in virtual machines for easier demos. We created a website (www.vmtn.net) for customers
to easily find and download these virtual machines. That was the modest beginning of virtual
appliances and Virtual Appliance Marketplace.

Since then this paradigm has been getting more attention. We ended 2006 with about 300 virtual appliances
available through the Virtual Appliance Marketplace (vam.vmware.com). Customers were downloading appliances at the
rate of one every minute. ISVs were
starting to sell production-ready virtual appliances by mid-2006. Even though many tech-savvy professionals
were starting to talk about the benefits, validity and long-term outlook of
virtual appliances, the vast majority, including press and analysts, took a
wait-and-see approach to this initiative. Virtual appliances received more attention in 2007 and below are some of
the significant highlights from this year:

1. Virtual appliances outside the security space became a reality with many tier 1 ISVs building virtual appliances. BEA launched their LiquidVM initiative. Business Objects, IBM, McAfee and others
   have all joined in with virtual appliance editions of their software
   stacks.

2. Customers
   were starting to buy production-ready virtual appliances. I’ve met numerous customers who bought
   virtual appliances and swear by the simplicity and ease of management they
   offer. Our marketing team will be
   posting quite a few success stories shortly.

3. Several
   leading analysts initiated coverage on virtual appliances. Gartner, IDC, Forrester, Yankee Group
   and others are actively tracking virtual appliances.

4. JeOS (Just
   Enough OS, pronounced “juice”) started to get traction within the OS
   community.

   
   
   Ubuntu JeOS is already
   available – kudos to the Canonical team for being the first OS vendor to take
   on Virtual Appliances. RedHat
   announced their intention to offer their version. Even though Microsoft hasn’t really
   participated in the virtual appliance space, their latest OS offers users the
   ability as part of Server Cores to install only those components that are
   required for each server installation and if they can get their licensing and
   pricing right, they could be a huge player in this space as well. I’m sure Novell and other OS vendors will
   eventually get on the bandwagon as well.

5. Leading
   vendors including Dell, HP, IBM, Microsoft, VMware and XenSource
   collaborated on Open
   Virtual Machine Format (OVF), which was submitted to DMTF as a
   standard for packaging and distributing virtual appliances.

6. The ecosystem
   around virtual appliances started growing with many startups either getting
   in or getting traction. rPath,
   virtualappliances.net, JumpBox, cohesiveFT stick out in this category.

7. Several
   vendors mimicked VMware’s Virtual Appliance Marketplace with their
   own. Parallels introduced their VA
   Directory. RedHat rolled out RHX.

8. Microsoft
   joined the party with the VHD
   Test Drive program (launched in November
   2006) to allow ISVs to redistribute Windows in a virtual machine for
   30-day evaluations.

Challenges

While the progress in 2007 was tremendous, there are still
some challenges that need to be addressed before virtual appliances become the
defacto standard for distributing and managing software. The challenges can be broadly categorized
into the following sections:

1. Lifecycle Management Tools:
   Even though many aforementioned startups and existing vendors offer some
   tools to create virtual appliances, the general feeling is that this area
   is still in its infancy. Customers
   frequently ask questions such as: how do I patch a virtual appliance? Can I use my existing patch management
   infrastructure to patch virtual appliances? Can I use my existing systems management
   tool to monitor and manage virtual appliances? At the same time, ISVs are now having to
   support OS patches as well, which they have not traditionally had to deal
   with. So they are looking for tools
   to track, test and roll out appropriate OS fixes in a timely manner. There is a bit of chicken-and-egg
   problem here with some customers not deploying virtual appliances until
   these issues are resolved while systems management vendors are reluctant
   to add these capabilities to their product until they see a wide-scale
   adoption of virtual appliances in their customer base. Better tools will help break the logjam.

2. Processes: More than the
   lack of tools, the real issue that comes up often times is that the
   industry is still trying to figure out how to manage virtual
   appliances. This paradigm
   completely changes many processes we have learnt and mastered over the
   years to manage our data centers. Customers
   are trying to answer some very basic questions such as: who do I call for
   support? How do I monitor and manage these virtual appliances? Will my existing tools work? If each virtual appliance has its own
   OS, how the heck do I manage this complexity? There are viable answers to all these
   questions but paradigm shifts don’t happen overnight. Vendors pushing virtual appliances will
   need to communicate a lot more to address such concerns.

3. Microsoft Windows Redistribution:
   Traditionally Linux has been the OS of choice for most hardware
   appliances. Vendors have not used
   Windows as much due to price and lack of modularity. On top of that, Microsoft does not allow
   ISVs to redistribute Windows in a virtual machine for production use,
   which really puts a damper on shipping Windows-based virtual
   appliances. For some ISVs this is
   an insurmountable problem because the cost to port the application to
   Linux is too much to swallow. As
   noted above, Microsoft launched their VHD Test Drive program, which allows
   ISVs to ship Windows-based virtual appliances for evaluation use
   only. This is definitely a step in
   the right direction but until they change their licensing policy around redistributing
   Windows in a virtual machine for production use, most virtual appliances
   will only be viable for ISVs who support both Windows and Linux. Once licensing and redistribution issues
   are resolved, Microsoft will need to work on a different pricing model for
   Windows shipped in virtual appliances. This will be especially interesting because a typical virtual
   appliance will only use a small part of the OS and this varies across ISVs
   so pricing it appropriately would be challenging.

Where do virtual appliances go from here? Will they turn the corner in 2008? Will the developments in 2008 be the tipping
point?  2008 sure promises to be an
exciting year for virtual appliances. Stay tuned and if you haven’t downloaded a virtual appliance, visit vam.vmware.com.

Happy New Year!