Virtualization Battle Not a Sure Thing

It wasn't what Microsoft delivered at Wednesday's "Heroes" event but what wasn't delivered that may make a difference.

One of the most important technologies on Microsoft CEO Steve Ballmer's mind at Wednesday's launch of the company's new server products wasn't really in attendance.

In fact, Microsoft is still 180 days from releasing its server virtualization technology -- its Hyper-V hypervisor (define).

"We're not the leader in server virtualization," Ballmer told the audience at the company's "Heroes Happen Here" server launch event in Los Angeles. That doesn't mean that he isn't deeply interested in Microsoft becoming the leader.

Microsoft staged the event to formally launch Windows Server 2008, Visual Studio 2008, and SQL Server 2008.

A hypervisor is a small, specialized operating system that sits directly on top of the server hardware and lets the server run more than one operating system above it, each within its own virtual machine (VM). Microsoft shipped the first full beta test version of Hyper-V – formerly codenamed "Viridian" – in December.

The company plans to make Hyper-V a standard component of Windows Server 2008 when it is finally available.

However, that delay, analysts say, gives Microsoft's main competitor in the market for virtualization products, VMware, not just a six-month technology lead over Hyper-V. It also gives VMware more time to cement its name into customers' minds as the leading vendor of hypervisor technologies.

Owned by EMC, VMware has been the leader in the market for hypervisors for years with its ESX line. In some respects, that means that Microsoft is the underdog, not only entering the competition late, but also not being the first in customer mindshare.

How Microsoft hopes to rout its competitors, however, is via the same route that it took in defeating the Netscape browser in the mid-1990s – by bundling the software with the operating system and not charging extra for it.

In this case, the operating system is Windows Server 2008 and the price, while not absolutely free, is nearly so -- only $28. Actually, the way it's structured is a customer can purchase editions of Windows Server 2008 without Hyper-V and those will cost $28 less than the regular edition that include it.

On stage, Ballmer lamented the fact that, despite all the interest in hypervisors, only some five percent of all servers worldwide are running virtualization technologies today.

"We want to democratize virtualization. It should be on 90 percent or 100 percent of servers, and not just five percent," Ballmer said.

The burgeoning interest in virtualization is being driven by the need for IT shops to cut budgets and reduce the number of personnel required to manage corporate workloads. One of the easiest ways to do that, proponents argue, is to virtualize servers in order to consolidate multiple applications onto fewer servers.

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