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Microsoft Uses VMworld to Hype its Hypervisor

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When VMware (NYSE: VMW) invited archrivals Microsoft (NASDAQ: MSFT) and Citrix Systems (NASDAQ: CTXS) to VMworld 2008, its user conference being held in Las Vegas through Thursday, everyone was surprised. Sure, VMware is trying to show it’s open, but being this open could be a recipe for trouble for the virtualization kingpin.

And that trouble was delivered by Mike Neil, Microsoft’s virtualization strategist, in an interview with Microsoft PressPass on the show floor which was promptly put up on Microsoft’s Website.

“Virtualization is about more than the hypervisor; it’s also about management software, and that’s where vendors differentiate themselves,” Neil said. He pointed to Microsoft’s “comprehensive server virtualization and management solution” which costs “about a third of VMware’s competing product” and, rubbing it in further, the fact that Microsoft’s Hyper-V Server 2008 hypervisor (define) will be available for no charge.

Microsoft’s management solution is System Center Virtual Machine Manager (SCVMM), which manages both virtual and physical machines giving it an edge over VMware.

“SCVMM’s being able to manage multiple hypervisor environments is a challenge to VMware,” John Premus, chief strategy officer at virtualization professional services and consulting firm VIRTERA told “VMware’s management platform isn’t very robust and a lot of customers realize that.”

Although VMware president and CEO Paul Maritz announced in his keynote speech Tuesday that VMware is integrating its management solutions into those from partners such as IBM (NYSE: IBM), that still leaves lots of opportunity for Microsoft because “that will address the top tier companies but a lot of mid-tier companies are already left out and they’re already Microsoft customers,” Premus said.

SCVM 2008 went into , and will be available in 30 days.

The price issue

By mentioning that Hyper-V is free, Neil struck to the root of VMware’s problem. “The biggest problem with VMware is their price, any customer will tell you,” Alex Bakman, virtual appliance vendor VKernel’s founder and CEO, told “People love their technology but their price is prohibitive.”

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