Have we hit peak virtualisation?

Server virtualisation is globally reaching its peak, with current growth only driven by maintenance demands, according to IT analyst firm Gartner.

In 2016, the global spend on x86 server virtualisation is expected to increase 5.7 percent to US$5.6 billion, announced Gartner, with Australia forecasted to grow 6.7 percent to AU$232.6 million.

"Despite the overall market increase, new software licenses have declined for the first time since this market became mainstream more than a decade ago," the analyst firm stated. "Growth is now being driven by maintenance revenue, which indicates a rapidly maturing software market segment."

While virtualisation remains an important tool for on-premises computing, alternatives like containers and the cloud is inducing a rethink for businesses and resellers.

"The market has matured rapidly over the last few years, with many organisations having server virtualisation rates that exceed 75 percent, illustrating the high level of penetration," said Gartner research director Michael Warrilow, who penned the report 'Market Trends: x86 Server Virtualisation, Worldwide, 2016'.

The SMB segment is driving the decline in on-premises virtualisation spend, according to the research. In contrast, x86 virtualisation rates remained stable among large enterprises in 2014 and 2015 - although this segment is also approaching saturation.

Gartner said that 'physicalisation', or running 'bare metal' servers, is on the increase.

"More than 20 percent of these organisations expect to have less than one-third of their x86 server OSs virtualised by 2017 — twice the amount reported for 2015."

Emerging trends like software-defined infrastructure (SDI) and hyper-converged integrated systems (HCIS) are also contributing to the slowdown of x86 virtualisation, reported the analyst firm.

"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," said Warrilow.

As saturation approaches, the top virtualisation vendors have been forced to "add more out-of-the-box functionality" and "faster time-to-value".

VMware remains the dominant leader in the market, but Microsoft has nudged its way in as "a mainstream contender" in enterprise computing. Citrix, Oracle and Red Hat are smaller players in the race.

The findings were released ahead of this week's Gartner Infrastructure, Operations & Data Centre Summit in Sydney, where Warrilow is the conference chairperson.