When Red Hat acquired KVM, it was either going to be a top or a flop. When they did that, VMware and Microsoft were battling each in a sometimes embarrassing competition of 'who has the biggest'. Citrix is barely hanging on, while other competitors just could not keep up in the years of these virtualisation war.

Everything depended on Red Hat finding some kind of niche for the KVM technology. It seems they found it: more and more hosters-turning-to-cloud providers are leveraging KVM (in the form of the newfound Red Hat Enterprise Virtualization) to create something you could call a 'Virtual Data Center'. Virtual Data Center is exactly the name Dutch company Oxilion uses for its service. The reason they chose KVM is quite banale: budget, the green ones, money. They found the open source model of Red Hat much more cost effective. That, and the fact that Red Hat are not being so nagging about VM-numbers. Most vendors license their kit based on that, but Red Hat only charges for direct services from them.

So there is exactly the niche Red Hat was looking for: relatively simple virtual service environments, based on Linux.

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