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January 23, 2008

Yesterday, Microsoft announced its plans to offer increased server virtualization services to businesses as it tries to compete with industry leader VM-Ware Inc.

The company unveiled a company wide strategy to target broad adoption of virtualization solutions among its large customer base. Microsoft announced the acquisition of San Jose, Calif.-based Calista Technologies, which creates desktop and presentation virtualization software, as well as an increased partnership with Citrix Systems.

While the product will compete with VMware’s ESX Server 3-i, launched at VMworld 2007 in San Francisco, a company executive believes its increased focus on the virtualization strategy will help them bridge the gap in the server virtualization space.

Both moves come on the heels of last month’s beta release of Microsoft’s new hypervisor-based server virtualization technology, Hyper-V -- the Window Server 2008-based platform which allows multiple virtual servers and machines to be run on a single physical server.

Bob Kelly, corporate v.p. of infrastructure server marketing at Microsoft said “the reality is that it’s early for this and that we believe our strategy of helping customers adopt an ‘and’ versus an ‘or’ is really critical and will accelerate adoption to virtualization.”

“Three or four years down the line, I think it’s going to be a close race,” added Kelly.

Server virtualization has recently been heralded as the “wave of the future” for enterprise IT, but Kelly said despite all this hype, most users have not gotten onboard yet. “We’re at the very early stages of adoption for this kind of technology, as less than 10 per cent of all servers are acting as hosts for server virtualization today,” Kelly said.

He added “this means that about 90 per cent aren't, and that the vast majority of the installed base is a rather small physical environment.”

“With this move you have an alignment between two very powerful heavyweights in the virtualization space and it delivers a tremendous amount of value for both customer bases. We’ve been partners with Citrix for nearly 20 years and are now extending that into the virtualization space,” said Kelly.

One of the ways Microsoft hopes to address this and make a splash in the market is through its Citrix partnership. In yesterday’s announcement, Microsoft unveiled a new Citrix software tool that will allow customers to easily transfer virtual machines between Citrix Xen-Server and Windows Server 2008 with Hyper-V to ensure greater interoperability for customers.

Microsoft said the tool will be available in May of this year. The software giant added that the partnership is part of its larger focus on integrated management for virtualization, which adds to its infrastructure virtualization software such as Hyper-V and Terminal Services within Windows Server 2008, as well as its Microsoft System Center management platform.

“Customers need one single pane of glass to manage physical and virtual environments. We fundamentally believe that the virtualization used today is at the very beginning of adoption and that customers will have physical and virtual environments for many years into the future and, therefore, need a single tool set for managing that environment. This is a critical differentiator, not only versus the competition, but more importantly a critical differentiator that allows customers to accelerate adoption of the technology,” said Kelly.

Rounding out Microsoft’s virtualization strategy, Kelly added that new licencing terms for Windows Vista clients in the enterprise which provides unique licencing and flexibility to run Windows in virtual machines on servers and access them from PCs or thin clients.

The annual subscription for Windows Vista Enterprise Centralized Desktop is now estimated at US $23 per desktop.

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Source: Microsoft