Martin Hingley's Blog

Virsto Highlights

• Founded in 2007, with $25 million in venture funding
• Has a storage hypervisor architecture
• Addresses server virtualisation and VDI
• Adds management tools to Hyper-V, VMware and (soon) Citrix
• Creates high performance space efficient virtual storage and very scalable snapshots claiming to overcome the poor performance of thin provisioned storage and under-utilisation of high performance storage systems
• Proposes a similar software approach to VMware in the server virtualisation area

Following our discussions with IBM a few weeks ago we set out to look at other vendors who are actively pursuing this theme. Virsto is one with strong claims. We discussed the latest developments recently with Eric Burgener, vice president of product management, and Gregg Holzrichter, vice president of marketing, following some discussions at the beginning of the year. I know our readers will be interested in their approach, which promises to save users costs by improving the utilisation of storage associated with Virtual Machines (VMs). It also has a software approach somewhat akin to VMware’s in the x86 server hypervisor area with product editions firmly attached to Microsoft Hyper-V, VMware ESX and Citrix XenServer hypervisors and their associated management suites.

Who Is Virsto?

Virsto was founded in 2007 with venture capital funding coming from Canaan Partners and August Capital initially. It increased its funding in 2011 to around $25 million by adding InterWest Partners, Southern Cross Venture Partners and Correlation Ventures. It is based in Sunnyvale, California with development operations in Melbourne, Australia and Minsk, Belarus and it has approximately 40 employees.

Virsto’s Value Proposition – High Performance Space Efficient Virtual Storage

There is a conundrum with modern storage, according to Virsto. In particular:

• High performance systems using fully allocated virtual disks suffer from poor space utilisation and slow provisioning, while
• Space efficient systems with thinly provisioned virtual disks suffer from poor performance
• In the VM world storage is usually over-provisioned and under-utilised because users assign static amounts to each VM

Virsto claims its software allows the creation of high performance space efficient scalable virtual storage and snapshots – HA storage with both high performance and good space utilisation. Administrators can apply variable amounts easily to each VM, reducing cost significantly – especially in VDI implementations.

Virsto Addresses Virtual Servers And VDI, Hyper-V, VMware And Xen

Virsto has had 5 production releases since February 2010. These have been tied to specific environments. In particular:

• It entered the virtual server market in Q2 2010 with an offering for Microsoft Hyper-V R2
• In April 2011 it introduced Virsto for Hyper-V VDI, for which it now has over 40 customers including Houghton Mifflin and Flextronics
• It recently launched Virsto for vSphere VDI; managing virtual storage as a plugin, Virsto provides scalable Virtual Machine DisK (VMDK) snapshots and clones, thin provisioning, storage tiering without specific hardware dependencies; it claims to provide block level storage performance with ease-of-use akin to NAS systems, which of course handle storage at the file level delivering savings of more than 50% on storage costs per virtual desktop; its software is priced at $2,800 per host

In 2012 it intends to extend its coverage to Citrix XenServer and to ship a product intended for use in server consolidation scenarios on VMware. In our view VMware represents the biggest opportunity – we show the hardware revenues of virtualised x86 servers by hypervisor in Figure 2. In the year to the end of June 2011 revenues from servers running VMware were $6.9 billion compared with $1.9 billion for Hyper-V and $1.3 billion for Xen.

Virsto’s Storage Hypervisor Claims

There are many approaches in the storage systems area which promise to save users money through better efficiency and higher utilisation (see our recent article on Avere for instance). NetApp has been the most successful of the newer companies, especially in providing thin provisioning, snapshots and clones. What’s missing from most is a heterogeneous approach, although IBM’s SVC allows arrays from many vendors to attach. Virsto is similar to VMware in having a software-only approach, although there’s nothing to stop its software being integrated into other vendors’ appliances.

Storage hypervisors are different from server hypervisors in Virsto’s approach because each version needs to be fitted specifically to each environment: so while VMware, Microsoft, Red Hat and Citrix just need AMD and Intel to support virtualisation, Virsto needs each server hypervisor in place in order to work. Users therefore need to think of its offerings as cost-saving enhancements to their virtualised server or desktop environment, rather than a radically different architecture to adopt.

We believe it will find good business among the many organisations (5k in the UK alone) which tried to implement VDI and failed. It will also help in reducing the cost of VDI, which has limited adoption. Up until now VDI would improve security, patch management and access control, but it wouldn’t save you money – you’d have to adopt a Microsoft Terminal Services approach to do that with much lower functionality.

Some Conclusions – Storage Hypervisors Don’t Suit The Current Market Players

It is not only the equivalent of VMware in the storage systems market that is lacking – there’s no Intel or AMD either (although the former claims to supply chips to 80% of storage appliances). The current market supports ‘actor managers’ who encapsulate their technical expertise and patents in their own appliances. Typically you can now pool storage resources as per the vision of Utility Computing, but you have to do so within a single vendors range. IBM is very brave in pursuing a storage hypervisor approach, presumably betting that its software success will be greater than any potential loss of hardware revenues. Other leading players such as EMC, NetApp, HP and Dell (see Figure 3 for their networked storage revenues) are less likely to change their go-to-market approaches – at least until it becomes clear that separating software from hardware gets users excited enough to vote with their wallets.

We like Virsto’s approach – it’s currently a small player, but has enough money to make waves through marketing. We hope it will make money through OEM deals and partnerships rather than selling out to a larger player, while developing a strong story as a software vendor. There are many parallels here with VMware in 2003, which has struggled to remain independent despite EMC buying a controlling stake very early on.

Please let me know you thoughts as a user, analyst or supplier by commenting on this article.

Filed under: Hypervisor, Storage Systems, Virsto Tagged: | Citrix, Eric Burgener, ESX, Gregg Holzrichter, Hyper-V, Microsoft, storage hypervisor, Virsto, Vmware, XenServer