Microsoft Fires Opening Shots in Virtualization Battle

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As it gears up to take on competing virtualization vendors in 2008, Microsoft this week announced new initiatives and product plans to help it get a leg up in what is becoming a cramped marketplace.

This wave of announcements came Tuesday at Microsoft’s Virtualization Deployment Summit.

For starters, the company announced it has acquired graphics virtualization vendor Calista Technologies.

“The addition of Calista technology to Microsoft’s virtualization portfolio will enable people to watch video and listen to audio, and will enable remote workers to receive a full-fidelity Windows desktop experience without the need for high-end desktop hardware,” said a company statement regarding the acquisition. Financial terms of the deal were not disclosed.

Microsoft also announced an expanded partnership with Citrix Systems to provide interoperability between Microsoft’s forthcoming Hyper-V hypervisor and Citrix’s competing XenServer. Under terms of the deal, Citrix will provide a tool to enable customers to transfer virtual machines between XenServer and Windows Server 2008 with Hyper-V.

A hypervisor is a small, specialized operating system that sits on 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” – last month.

Citrix plans to release a test version of its tool during the second quarter and have the final version set to go when Microsoft releases Hyper-V, which is scheduled to ship within 180 days of Windows Server 2008. Microsoft’s new server product, in turn, is slated for release later this quarter.

“Customers can have Microsoft’s platform and Citrix’s solution together,” Mick Sumit Dhawan, director of product marketing at Citrix, told InternetNews.com.

In addition, Microsoft reversed an earlier decision and has decided to allow home editions of Windows Vista – Home Basic and Home Premium—to be run in virtual machine environments.

The company also announced it has dropped the annual subscription price for its Windows Vista Enterprise Centralized Desktop to $23 per desktop per year for clients covered by Software Assurance for Windows Client from $78.

Finally, Microsoft announced Tuesday that Office 2007 and 2003 will be supported when running in both Microsoft Application Virtualization 4.5 and SoftGrid Application Virtualization 4.2. With the added support customers can run multiple versions of Office on the same device side by side, the company said.

All of the moves are part of a larger strategy meant to extend use of Microsoft’s virtualization technologies “from the datacenter to the desktop,” a Microsoft official told InternetNews.com. The moves are timely, the spokesperson said, because despite all of the noise in the media about the technology and its promise, actual virtualization deployments are still relatively new and this emerging market remains wide open to competition.

“Today, only about five percent of worldwide servers and less than one percent of desktops are virtualized,” said Shanen Boettcher, Microsoft general manager for the Windows client.

Interestingly, Sun Microsystems, which has virtualization products of its own, including its xVM Server, agrees.

“Today’s news from Microsoft echoes the point that the virtualization market is still wide open [and] by many accounts, the number of servers that are virtualized is still in the single digits,” Vijay Sarathy, senior director of marketing for xVM at Sun Microsystems, told Internetnews.com in an e-mailed statement.

That implies that, despite an early lead in the market by VMware, nothing is assured.

“What’s important is that [today] Microsoft is making a serious debut in the virtualization space,” Roger Kay, president of analysis firm Endpoint Technologies, told InternetNews.com.

Furthermore, this is just the first shot in the battle for king of the virtualization hill, he said. For one thing, Microsoft’s ability to bundle Hyper-V with Windows Server 2008, which promises to be a popular server platform, gives it a serious advantage over competitors.

“Certainly, VMware has the potential to get ‘Netscaped,'” Kay added, referring to Microsoft’s move to bundle its Internet Explorer browser with Windows in the 1990s, thus crushing the then-dominant Netscape browser.

This article was first published on InternetNews.com.