Microsoft snags Fortune 500 customer away from VMware

CH2M Hill joins the list of companies making a switch to Microsoft Hyper-V, citing cost savings as the big reason for the migration

This week's VMworld conference is all about VMware's technologies, its users, and its partner ecosystem -- but that isn't stopping Microsoft from trying to put a damper on VMware's festivities. Microsoft may once again find itself squeezed into a 10-by-10-foot booth at VMworld, and the company may not be showing off Hyper-V during the show, but that doesn't mean it's limiting itself to simple Twitter conversations as it did last year.

Only days before VMworld kicked off, Microsoft announced it had taken a new Fortune 500 customer away from VMware. CH2M Hill, an engineering, procurement, construction, management, and operations company, was an avid VMware ESX hypervisor user going back to 2005, but it's decided to switch to Microsoft Hyper-V.

[ Also on InfoWorld: Are VMware shops ready to move from vSphere ESX to ESXi? | Make sure to keep up with all the latest virtualization news with InfoWorld's virtualization newsletter. ]

CH2M Hill cited costs as a major driver in its decision, saying it expects the move to save the company more than $3.2 million over the next three to five years. It also expects to reduce server administration work by 30 percent, allowing the company to focus on more strategic work such as a branch office virtualization, infrastructure upgrading, and architectural planning.

"The company was cutting costs across the board, and we wanted to push forward with virtualizing more servers, especially in our field offices, but we just couldn't do it with VMware," said Greg Barton, a senior analyst at the Enterprise Systems Group in CH2M Hill. "By switching to Microsoft we will save $280,000 in software fees. Plus, we can now afford to tackle our 600 field servers and are aiming to virtualize 20 percent of these computers each year. At $5,000 a server, that's a savings of $3 million over the next three to five years."

According to the announcement, CH2M Hill has already migrated 30 of its virtual machines to Microsoft Hyper-V, but that doesn't really seem like a lot, considering the company said it had 350 virtualized servers in its data center and another 100 servers in regional offices. It did say, however, that it would have all of its virtual machines migrated over the next three years.

Three years in the virtualization world seems like an incredibly long time. Perhaps that extended migration period has more to do with existing VMware licensing contracts than anything else. And if it is going to take three years to migrate everything, things could possibly change yet again. VMware can, after all, be very persuasive when it wants to be.

Another interesting note: CH2M Hill said it isn't just using Hyper-V virtual machines for development and test servers. It is also currently using Hyper-V to run critical applications such as Microsoft Office SharePoint Server 2007, databases running Microsoft SQL Server 2008, Internet Information Services 6.0 and 7.0 Web server, and, soon, Microsoft Exchange Server 2010. The company also uses Microsoft System Center to create virtual machines and to give business groups the ability to create virtual machines as well.

"System Center Virtual Machine Manager lets business groups self-provision and manage virtual machines as needed, which saves the IT staff a lot of time so we can plan for future projects and initiatives," Barton said. "In fact, we could do everything in Hyper-V that we could do with VMware. Hyper-V also compared well on performance and ease of administration. We were very happy with the results."

If CH2M Hill follows through with their plans, this could be a big win for Microsoft in its hypervisor battle with VMware.

And while one company switching is interesting, other global companies doing the same makes for a much better story. Back in May, Patrick O'Rourke, director of communications at Microsoft, said global companies switching from VMware or adding Hyper-V and System Center into their VMware mix included Premiere Global Services (U.S.), Group Health (U.S.), Miele Appliances (Germany), Union Pacific (U.S.), Telecom Italia, SuperGroup (South Africa), Mercuri Urval (Switzerland), (U.S.), Landratsamt Bayreuth (Germany), Swedish Red Cross, Apps4Rent (U.S.), and Kolektor Group (Slovenia).

O'Rourke also said, "Most of the above enterprise customers turned to Microsoft because we were able to extend their existing investments in Windows and System Center, and we have key features they need (e.g., live migration, manage ESX Server and Hyper-V from single console, built-in clustering)." He went on to say that Microsoft is painting a picture for the future in that "customers are learning more about our PaaS, Saas, and IaaS capabilities to help them transition to the cloud."

In April, IDC published its worldwide quarterly server virtualization tracker report, which may validate Microsoft's growth claims. The report still has VMware ESX listed as the number one virtualization platform, with total licenses increasing 19 percent year over year in Q4 '09. But it showed that Microsoft Hyper-V continued its ascent, capturing the third highest market share by growing 215 percent year over year.

This is all really good news for Microsoft. But if VMworld 2010 is anything like VMworld events in the past, get ready for a complete onslaught of information, product news and announcements, and customer wins and expansion notes from VMware that could quickly eclipse Microsoft's new fortune.

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