Red Hat currently stands tall as the market leader for container software revenue, but that could eventually change with VMware's new Kubernetes strategy.
According to a report by IHS Markit, which is now part of Informa, Red Hat has raked in a 44% share in the recent first quarter for container software market revenue. Docker clocked in at second place with a 23% market share, followed by Pivotal/VMware (6%.) Rounding out the top-five, Rancher Labs and Canonical came it at 3% and 2% respectively.
At VMworld last week, VMware announced its Tanzu platform. Working in tandem with Pivotal, which VMware is buying outright after partnering with Pivotal on PKS, VMware is putting a major effort behind helping organizations build, run, and manage software on Kubernetes.
VMware said the new Tanzu products and services would help enterprises build modern applications, run Kubernetes with consistency across environments, and manage all their Kubernetes clusters from a single control point.
According to IHS Markit's research, customers for the PKS container software topped 140, in the first quarter, which pales in comparison to Red Hat's container software, OpenShift, that has more than 1,100 customers. IHS Markit's report said that more than 750 customers had deployed Docker Enterprise by the end of April.
Vladimir Galabov, principal analyst at IHS Markit, said Red Hat's success in container software was based upon the company's hands on sales strategy whereby its sales staff consults and trains developers first and then monetizes its container software once enterprises have it in production.
Red Hat's container software success is also due to its deal to buy CoreOS. Red Hat bought CoreOS, which includes its Kubernetes-based Tectonic orchestration system, for $250 million last year to improve its automation capabilities in Kubernetes. CoreOS also brought new policy-setting, management and automation features into OpenShift.
"Red Hat has secured a leadership position in the market with a well-timed acquisition of CoreOS and a differentiated, hands-on sales strategy,” Galabov said, in a statement. “The appeal of this growing market has driven other vendors to step up their game, with Docker making peace with Kubernetes and VMware forming a clearer go-to-market strategy after acquiring Heptio.
"VMware is likely to mirror Red Hat’s sales strategy and increase its focus on consulting and training enterprises to more effectively enable container software deployment in production.”
VMware bought Kubernetes startup Heptio last year, and it plans to integrate Pivotal Software's developer platform, tools and services into its Kubernetes portfolio once that deal is complete. At VMworld, the company claimed to be the third-largest contributor to the Kubernetes project.
Galabov said that automation features were the key to container growth, and that vendors were competing to prove that their Kubernetes-based offerings were best in class.
With all of the advantages that Kubernetes and containers bring to enterprises, hyperscale cloud providers and service providers—including helping them manage their multi-cloud environments as well as scale out new services and applications for edge computing, 5G and IoT—there's still a lot of runway left for more deployments.
"Hyperscale cloud service providers were the first to adopt container software in their data centers and they already run container operating systems in virtual machines in more than one-third of their multi-tenant servers," Galabov said. "In comparison, telcos and enterprises run container software on only 8% of their multi-tenant servers today.”
Multi-tenant servers accounted for 67% of the total servers shipped in the first quarter, with a total of 48% of those servers self-managed either via open source (38%) or proprietary (10%.) Bare metal containers servers represented 5% of the total multi-tenant servers in the first quarter.
VMware took the top spot in first quarter server virtualization software revenue market share with 47%, followed Microsoft (14%) and Red Hat (11%.)
As enterprises and telcos ramp up their adoption, total container software market revenue will grow at a 30% compound annual growth rate from 2018 to 2023, surpassing $1.6 billion, according to IHS Markit.