The last time the founders of Qumranet began a start-up it ended with a US$320 million exit. Now they are going after the virtualization market.
Even people who shudder at the mere mention of "virtualization" can't ignore the hottest topic in today's high-tech world for much longer. About a month and a half ago the market leader, VMware, completed a successful IPO (initial public offering), raising over US$900 million. A few days later Citrix announced that it will pay US$500 million for one of VMware's competitors, XenSource.
Being relatively new, the virtualization market hosts only a small number of big players. VMware is the biggest, with a market share of about 85 percent, followed by XenSource and Microsoft. Against these giants, one tiny company believes its technology can earn it a significant cut of the emerging market: Qumranet.
The company was founded in 2005 and employs just 35 people, but behind Qumranet can be found some familiar names, like Benny Schneider and Rami Tamir, who founded Pentacom and P-Cube, both sold to Cisco for US$320 million, and CTO Dr. Moshe Bar, who was one of the founders of XenSource.
"We've decided to go for virtualization because it's one of the hottest areas at the moment,"says CEO Benny Schneider. "And we plan to compete directly with XenSource."
Inside the kernel
Like its competitors, Qumranet is developing a virtualization solution that enables users to run several operating systems on a single computer. This way they can launch a Windows OS from Linux, or run a large number of operating systems on a single server, allowing fewer physical servers and saving on hardware and electricity.
However, Qumranet's software, which is called KVM (Kernel-based Virtual Machine), has one special advantage: it is already embedded in the code of the Linux OS. Since it is an open source product, Qumranet was able to convince the developers of the Linux kernel to integrate KVM as part of the operating system, saving the need to install it.
"Our product is inside Linux distributions like Red Hat's Fedora, Ubuntu and soon we will be inside Novell's SUSE," says Schneider. "This is actually the publicly available half of the product." According to Schneider, the other half is a commercial product intended for big organizations, based on KVM. This product, called Solid ICE, was announced Tuesday at the DEMOfall conference in San Diego.
Many companies today use Linux based servers, and Qumranet hopes that some of them will choose to buy its product because KVM is already in the operating system they work with. Furthermore, according to Schneider, unlike the other products on the market, the fact that KVM is integrated as part of the Linux kernel gives it an advantage in terms of performance.
However, technologically KVM still has some way to go. "In certain areas of virtualization we show better performance than our competitors," says Schneider. "But there are other areas where we are not as good. We are working together with the open source community to improve these areas."
Schneider claims that KVM has several advantages compared to VMware's products. "Our product uses innovations that were not around when VMware developed theirs. For example, we've designed KVM to better support the new Intel processors."
But the fact that KVM is an open source product has some commercial disadvantages. Since KVM is integrated into Linux, it can be used by anyone without paying anything to Qumranet, and with no obligation to buy the commercial product when it hits the market. Nevertheless, Schneider believes the commercial product has potential. "I believe we have an application that the market needs, and the combination between KVM and the commercial product gives us an advantage".
Fighting over the Linux market
Currently, Qumranet's most immediate competitor is XenSource. Both are developing a commercial product for the Linux market based on open source. XenSource's virtualization platform is called called Xen.
Since XenSource was bought by Citrix and is championed by Microsoft, it seems to be on the rise. However, judging from XenSource latest statements, and what's known about Citrix's business, it seems that XenSource will turn most of its efforts to Windows rather than Linux. For the people at Qumranet, this is excellent news.
"At the moment, our first reaction to the Microsoft-XenSource-Citrix front is wonderment. I would say our position only improved," says Schneider. "In both cases we are talking about a product with two sides -- commercial and free. I'm not sure the financial backing XenSource now has will help it because the open source community does not like commercialism. Eventually, it is not the money that decides, it's the community".
Schneider adds that the success of VMware and XenSource works in favor of Qumranet. "This week we intend to hold our first developers conference, and I can say that the level of interest got much higher in view of recent events. This only goes to show how important virtualization is today."