This Frost & Sullivan research service titled Virtualization: Funding Trends and Prospects offers insights on the funding trends within the virtualization space and offers recommendations for investors and stakeholders who are interested in venturing into this market segment. In addition, virtualization start-ups that might potentially require funds to take their technology to the next stage could benefit by getting a glimpse of key venture capitalists and other funding bodies. The key strategies that could enable entities in procuring funds are also provided.

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Technology Overview

Robust Funding Inflows for Virtualization Warm up Investment Climate

Funding for virtualization had been vigorous in 2010, with proportionately higher monetary volumes for marketing activities. Post-recession companies are seeking cost-efficient solutions that offer computing capabilities without compromising on performance. Virtualization has emerged as the ideal option in this scenario. With the unique capability to upscale IT capacity in a short time frame, the dynamism which virtualization offers ensures that the ever-demanding business needs of enterprises will be addressed. “The amount of money pooled into virtualization in the past two years stands testimony to the rapid adoption of this technology; virtualization firms are witnessing increasing technological development in the wake of the huge influx of funds,” notes the analyst of this research service. “Integration of existing technologies with new cutting edge technologies is further driving the research activities in this sector.”

Server virtualization had received the highest amount of funding in 2010. Vendors delivering technologies capable of addressing the existing limitations of virtualization have been increasingly funded in the recent past. In the IT sector, virtualization is viewed as a highly capable technology. The avid interest shown by venture capitalists, who are major participants in the information and communications sector (ICT), toward start up virtualization firms with competent solutions, validates this point.

A key challenge restricting funding inflow toward certain kinds of virtualization can be attributed to the fact that the potential of these implementations have not been fully realized. As very few firms participate in this domain, there is less diversity in the solutions offered. While the proven and rapidly adopted kinds of virtualization have been favored by investors, the response toward upcoming virtualization types/technologies is mixed. Some nascent implementations have received ample funding while others are yet to acquire the required financial support. Inflows for operational expansion are poised to expand the customer base across the globe and assist in the rapid proliferation of the technology. “In future, the investments are likely to be made in projects where the focus is on blending cutting edge technologies to address the limitations of virtualization technology,” concludes the analyst. “Unexplored kinds of virtualization are expected to be funded in the near future to pave the way for a hybrid virtualized environment.”

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