This IDC study examines the market share of virtual machine software vendors in 2016 as well as the market forces that influenced their performances. Virtual machine software is a competitive market in IDC's software taxonomy and a submarket of the software-defined compute (SDC) software market. Virtual machine software includes hypervisor revenue derived from traditional server virtualization deployments and does not include hypervisor revenue that is bundled with cloud system software for cloud deployments."The VMS market is seeing declining revenue for virtualization as value is shifting away from the core virtualization platform as suite-based products that bundle in virtualization with management, software-defined storage, software-defined networking, and cloud system software take over the market. However, virtualization shipments are still healthy," says Gary Chen, research manager, Software-Defined Compute. "Virtualization is still a core compute foundation for the datacenter, but the role of the hypervisor is beginning to change due to the emergence of containers and cloud computing."