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the real boost for Microsoft's server virtualization market share will come with next year's release of Windows Server 2008 and its integral Windows Server Virtualization feature, according to experts.
Citrix announced its purchase of XenSource earlier this month, right after server virtualization market share leader VMware went public. The news led some observers to predict that Microsoft would take advantage of the new partnership and try to chip away at VMware's lead.
There are some opportunities in that market dynamic for Microsoft, according to Michael Rose, an associate research analyst at IDC in Framingham, Mass. But, Rose said, "The real opportunity with this announcement isn't for Microsoft. It's for Citrix. They've become a much broader virtualization company."
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Microsoft has just a 7% server virtualization market share, Rose said. The company's bigger opportunity will come in February, when Windows Server Virtualization hits the market, said Mark Bowker, an analyst for Enterprise Strategy Group in Milford, Mass. Only 5% of servers are virtualized, according to Microsoft, and many users who haven't already aligned with VMware are "really relying on what Microsoft is going to come out with next -- especially the [small and medium-sized businesses]," Bowker said.
Windows Server Virtualization will launch in February as part of Windows Server 2008. Microsoft is taking a "low-price, high-volume" business approach and plans to use its channel partners to get more IT professionals virtualizing their servers, said Larry Orecklin, the company's general manager for system center and virtualization.
"It's still a nascent market segment," he said.
Microsoft's current server virtualization offering, Virtual Server, is a free license that comes with Windows Server 2003. Users have downloaded it 840,000 times, and "thousands" use it today, Orecklin said.
Bowker said that Virtual Server "just isn't ready, feature for feature," to compete with VMware, but more users will gravitate towards Windows Server Virtualization because of their familiarity with other Microsoft products.
Microsoft "wasn't even a player" in the server virtualization market share battle until about 18 months ago, according to Rand Morimoto, president of Convergent Computing, a Microsoft partner in Oakland, Calif. However, recent service pack updates have given Virtual Server more of the feature sets customers want, he said. He expects to see more movement toward Microsoft when Windows Server Virtualization launches.
"It's been kind of a no-brainer for a lot of [customers]," he said.
However, because of VMWare's market dominance and the demand for server virtualization, Convergent Computing also works with VMware and XenSource products.
The acquisition of XenSource by Citrix will boost the Microsoft side of the server virtualization market share battle. "Citrix has been one of Microsoft's best partners for quite a while," working with Microsoft's Terminal Services to bring server-based applications to desktops, Morimoto said.
XenSource uses Microsoft virtualization technology to manage Linux- and Xen-based guests and also works with Microsoft on setting virtualization standards. Orecklin did not provide any specifics on what new opportunities the acquisition could present but did say that it creates "an even stronger partner to work with."
Rose suggested that Microsoft could use XenSource technology to give its Windows Server Virtualization hypervisor a more sophisticated capability to manage virtual machines, much like Citrix Presentation Server enhances Microsoft Terminal Services.
"Strategically I think it makes a lot of sense," he said.
Morimoto said he could not think of any specific opportunities for Microsoft to increase its server virtualization market share through the Citrix-XenSource acquisition but that the deal does have potential.
"It's better than if a Linux provider bought XenSource," he said.