The virtualization market is slowing according to IDC.

It says growth in virtualization licenses shipped in Q2 - before the virtual bottom fell out of the global economy - increased only 53% year-over-year compared to 72% just the quarter before.

Analyst Brett Waldman says that means that the "market is showing early signs of maturation" and that "high-volume consolidation opportunities - the low-hanging fruit in the x86 server virtualization market - is starting to dry up. This is, in turn, resulting in smaller deals overall."

IDC's numbers say new virtualized server shipments worldwide increased 52% year-over-year in Q2 compared to 70% in Q1. Revenues grew 15% in Q2 compared to 32% in Q1 - primarily from the x86 market, as you might expect.

Waldman figures vendors better start chatting up mid-sized companies and find a sales peg other than consolidation.

VMware is still number one with 78% of the revenues in Q2 on business up 27% year-over-year - between ESX and VMware Server it owns 44% of the x86 market - but Microsoft, that interloper, scooped up 23% of new shipments between its newfangled Hyper-V and Virtual Server 2005.