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VMware shift could boost Microsoft's server virtualization market share

Microsoft's server virtualization market share could increase thanks to next year's Windows Server Virtualization release and VMware's revenue model shift from its hypervisor to value-added services, according to Microsoft partners.

VMware Corp. partners said they don't see any imminent threats to VMware's server virtualization market share, but some Microsoft partners see it differently.

Microsoft partners said the recent shift in VMware's revenue model -- away from its market-leading hypervisor and toward more value-added services -- creates an opening for Microsoft, and that Microsoft will be able to better manage its hypervisor and support its applications than VMware can.

"Microsoft's coming out [with its own hypervisor] obviously played into that decision," said Ken Young, chief technology officer for NuSoft Solutions Inc., a Troy, Mich.-based Microsoft partner. "It's going to be a potential boon for Microsoft in that space."

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Microsoft's Virtual Server 2005 today has just a 7% server virtualization market share, according to IDC.

Virtual Server is a Type II hypervisor, which must be installed on top of an operating system. That means that any application running on a Type II virtual server has to pass any requests to the virtual server, which passes them to the hypervisor, which hands them off to the operating system through a series of application programming interfaces (APIs) and administrative procedures. Results and responses from the application have to follow the same series of handoffs, limiting the range of commands and slowing responses.

Viridian -- the code name for the virtualization functions Microsoft is building into Windows Server 2008 -- is a Type I hypervisor. That means it not only runs within the operating system, it runs very close to the kernel of the OS, drastically reducing the security and administrative processes it must go through before having a request fulfilled. Microsoft plans to release Viridian with Windows Server 2008 in the first quarter of next year.

"Obviously, VMware has a head start in the marketplace, but Microsoft and others are catching up," said Vince Conroy, chief technology officer for FusionStorm, a San Francisco-based systems integrator (SI) and managed service provider that works with both VMware and Microsoft.

VMware's free VMware Server is a Type II hypervisor; its ESX Server is a Type I hypervisor, designed to run on the bare metal of the server supporting both the OS and the hypervisor.

Microsoft's current server virtualization offering, Virtual Server 2005, is "not as good as VMware," said Rand Morimoto, president of Convergent Computing, a Microsoft partner in Oakland, Calif. that also sells VMware. "But with Viridian, [Microsoft] leaps so far forward, ahead of where VMware is."

For example, Microsoft's Exchange, SQL and other servers sometimes have issues when running in a VMware environment, and customers have to deal with two different vendors to resolve their problems. With Microsoft servers running on a Microsoft virtualization platform, those compatibility issues become less common, Morimoto said.

"And from a customer standpoint, it's just one phone call to get the problem solved," he said.

Patrick O'Rourke, Microsoft's group manager for Windows infrastructure, declined to comment on VMware's shift toward services, but he said in an email that Microsoft's "high-volume, low-price" business model will help the company increase its server virtualization market share.

Microsoft has also launched a new initiative to help its value-added resellers and SIs boost its server virtualization market share. It's called the Quickstart for Get Virtual portal, where registered Microsoft Partner Program members can share best practices and receive marketing support, sales and technical training. Microsoft already has almost 800 certified and gold-certified SIs working with virtualization, and the goal is to recruit 300 more in the U.S. within six months, O'Rourke said.

Convergent Computing is already working with seven early-adopter customers using a preview version of Windows Server Virtualization and has posted case studies on the Quickstart for Get Virtual portal, Morimoto said.

"It's great for us," he said. "With Microsoft behind the work we're doing, it really provides a whole lot of benefit."

NuSoft is also participating in the program. "[It has] allowed us to really get our staff ramped up," Young said. This training and preparation months in advance should make for a "nice, safe, easy launch" next year, he added.

FusionStorm has not started preparing to sell Windows Server Virtualization because most customers aren't asking about it yet, and Conroy doesn't want to force it on them, he said.

"When customers feel more comfortable with it, we will put more focus and time into that technology," he said.

But in time there will "definitely" be a lot of interest among customers, he said.

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