It's a Virtual World

At its annual partner conference last week in Boston, Microsoft plugged one of the final gaps in its virtualization strategy: The company announced that Virtual PC 2004 with Service Pack 1 (SP1), the latest version of its client-side virtualization hosting environment, will be made available for free. The move follows an earlier and somewhat unexpected decision to release Virtual Server 2005 R2 for free as well. Put these announcements together and we have the makings of a holding pattern until Microsoft ships its long-awaited Hypervisor for Longhorn Server. That Windows Server component is due sometime in 2008.

Just a few years ago, when Microsoft released its first version of Virtual Server, the company knew its product was somewhat lacking compared with VMware products of the day such as VMware GSX Server and VMware ESX Server. So the company positioned Virtual Server to accomplish essentially a single, if strategic, goal: Virtual Server was designed to allow enterprises to virtualize legacy Windows NT servers with legacy workloads (Microsoft Exchange Server 5.5, for example), therefore reducing the number of physical servers administrators would need to manage and simplifying management.

As a long-time proponent of virtualization, I felt at the time that legacy server consolidation was a valid use of the technology, but only one of the many ways that corporations might want to use it. Meanwhile, VMware's more full-featured virtualization servers and management tools opened up virtualization to a much wider range of uses. And just as important, VMware's server could run on Linux and support Linux guest environments. Put simply: Virtual Server was seen as inferior.

Today, VMware and Microsoft are on a more level playing field because of various moves that have improved both the core Virtual Server product and its chances of competing with VMware. Virtual Server 2005 R2, the latest version, now natively supports several enterprise-oriented Linux distributions, although of course the server itself still runs only on Windows Server. Licensing of Microsoft's Virtual Hard Drive (VHD) virtual disk format has been more successful than expected, and many Microsoft and third-party management tools can now natively understand virtual disk-based system installs and work with them in unique ways. And, finally, Microsoft is addressing the fact that Virtual Server customers will want to use the server for far more than just consolidation.

Most important, perhaps, because Virtual Server 2005 R2 is a stepping stone to the Hypervisor feature that will ship after Longhorn Server, it's a safe bet for Microsoft customers to adopt now. Knowing that Virtual Server's VHD format will be natively supported in future Windows Server versions--all while offering additional performance benefits on those platforms--is a huge help to customers trying to decide which virtualization platform to adopt.

From a competitive standpoint, we're at an interesting point in history: Microsoft's current and future-generation virtualization platforms for the server and desktop are now free. Microsoft will later integrate them directly into the company's OSs, providing huge performance and management benefits. Meanwhile, VMware also offers various free virtualization products and arguably still maintains a technical lead over Microsoft. But I can't help but think that Microsoft has already won this round: Increasingly, the software giant's virtualization products will be seen as the right ones for its customers going forward.

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