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Microsoft to Launch Virtual Server 2005

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Virtualization will get another lift next week when Microsoft rolls out its Virtual Server 2005, a product geared to help companies efficiently pool computing resources.

Virtualization is a hallmark of the movement to consolidate servers by allowing multiple instances of an operating system to run on a single machine.

The Redmond, Wash., software giant hopes to capitalize on this Monday by
offering two editions — standard and enterprise — that help customers
automate their software test and development environments, re-host legacy
applications and consolidate server workloads on Windows Server 2003, NT and
2000 systems.

Ultimately, the company believes it will help customers pare hardware
installations by 50 percent or more and in many cases speed server
provisioning time by 50 percent or more. IBM, EMC and others are all
employing the technology to perform some sort of infrastructure

IBM uses virtualization to help customers run combinations
of Windows, Linux and Unix on its Power architecture and servers. EMC leapt into the fray by purchasing Intel-based specialist VMware
earlier this year in the hopes of bolstering its information lifecycle
management strategy.

Many experts anticipate Virtual Server 2005 will compete with VMware’s GSX
Server, the company’s mid-level virtualization engine, which was refreshed
earlier this year.

In fact, Gartner analyst Tom Bittman believes Virtual Server will have a
profound effect on VMware’s GSX share for test and developmental servers,
predicting that the market share for GSX will be cut in half by the end of
2005 due to Microsoft’s new entrant.

“VMware has been a market dynamo, but they are expensive,” Bittman told “Virtual Server is going to blast this market wide
open… I’d expect some large number of deployments by the end of next
year — 100,000 is not out of the question. This dramatic increase will
start to have an impact on the Intel server market, as system utilization
increases, and users require fewer servers.”

To be sure, Virtual Server is much less expensive than GSX, which is priced
starting at $2,500 for 2-CPU servers. Virtual Server 2005 Standard Edition
supports up to four processors and is expected to retail for $499.
Enterprise Edition supports up to 32 processors and should retail for $999.

To offset what could be a bleed in market share due to Microsoft’s
aggressive pricing, Bittman said he expects VMware to cut the price for GSX
Server down the road. Not everything is rosy in Microsoft’s future for
Virtual Server, as the analyst said Virtual Server has more performance
overhead, more stability issues, and more security issues “due to the use of
a heavyweight host operating system.”

Ultimately, Bittman predicts VMware will retain 80 percent market share in
virtualized production servers by the end of 2005.

Microsoft meanwhile has made Virtual Server 2005, delayed by a year or so, a
core component of its far-ranging Dynamic Systems Initiative, which is the
company’s plan for making it easier for customers to create and run
distributed systems.

Microsoft has convinced several major IT vendors of Virtual Server’s
effectiveness. AMD , Dell
, HP , IBM , EDS , CA and Veritas are offering customers tools to
help businesses get the product up and running on Windows Server 2003.

Both the Standard and Enterprise editions will be available within 30 days
through retail and volume licensing, and will be licensed on a per-physical
server basis.

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