The worldwide server virtualization market is reaching its peak, according to a new report from Gartner Inc.

The global x86 server virtualization market is expected to reach $5.6 billion in 2016, an increase of 6% from 2015, the firm says. Despite the overall market increase, new software licenses have declined for the first time since the market became mainstream more than a decade ago.

Growth in the market is now being driven by maintenance revenue, which indicates a rapidly maturing software market segment, the report says.

"The market has matured rapidly over the last few years, with many organizations having server virtualization rates that exceed 75%, illustrating the high level of penetration," says Michael Warrilow, research director at Gartner.

The server virtualization market continues to be dominated by VMware, although Microsoft has worked its way in as a mainstream contender for enterprise deployments, Gartner says. There are also several niche players including Citrix, Oracle and Red Hat, in addition to an “explosion of vendors in the domestic China market.”

While server virtualization remains the most common infrastructure platform for x86 server operating system (OS) workloads in on-premises data centers, Gartner analysts think the impact of new computing styles and approaches will be increasingly significant for the market. This includes OS container-based virtualization and cloud computing.

Usage of server virtualization among organizations with larger IT budgets remained stable during 2014 and 2015, the report says. It continues to be an important and heavily used technology for these businesses, but this market segment is approaching saturation.

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