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Hyper-V Replica, Windows Server 8 debut at Microsoft WPC 2011

As Microsoft showed off Hyper-V Replica and Windows Server 8, partners talked about how they make money and find success against VMware.

LOS ANGELES -- Hyper-V Replica, the next version of Microsoft’s virtualization platform, will support more than 16 virtual CPUs per virtual machine.

The public got its first glimpse of Hyper-V Replica and Windows Server 8 at the Microsoft Worldwide Partner Conference (WPC) on the same day that VMware Inc. launched vSphere 5. The virtual CPU (vCPU) enhancement in Hyper-V Replica is one of hundreds of new features in Windows Server 8, Microsoft said.

“The improvements in Windows Server 2008 R2 and Service Pack 1 bring a lot of feature parity with [VMware],” said Dan Germain, director of hosting infrastructure for Microsoft partner Outsourcery, a cloud service provider. “The next release of Hyper-V will really nail it.”

Microsoft executives also took their share of shots at VMware’s new memory-based vSphere 5 licensing, using its potential effects on cost to hammer home their message that Microsoft virtualization is more affordable for customers – and somewhat counter-intuitively  more profitable for partners.

Whereas Hyper-V is included in Windows Server licenses, VMware licenses vSphere 5 on a per-CPU basis. And each vSphere edition sets a limit on how much virtual RAM users can assign to their virtual machines (VMs).

“It’s based on RAM allocated, not RAM used,” said Rohit Rahi, a Microsoft product marketing manager. “That’s a huge, huge, huge difference. … [VMware’s] licensing model has changed three times in the last three years, so what’s the reliability that it won’t change again in six months?”

Making money on Hyper-V

In Gartner Inc.’s latest server virtualization Magic Quadrant, the analyst firm named Microsoft a market leader for the first time (joining VMware and Citrix Systems). But Gartner also noted that, because Hyper-V is free, the channel does not have as much incentive to push it to customers.

At WPC, Microsoft told partners that the money lies in the management. Every $1 in Microsoft server virtualization software sold generates $34 in sales of complementary products and services for partners, said Sally Kim, the company’s competitive strategy director.

“It’s services dollars,” she said, “--not necessarily licensing dollars, but definitely services dollars.”

Dave Sobel, CEO of Microsoft partner Evolve Technologies, also dispelled the notion that the channel can’t make money on Hyper-V. “There are a lot of people who’ve built successful businesses around Linux, and that’s free,” he said. “I don’t buy it.”

The key to Microsoft’s management strategy is its System Center line, which includes Virtual Machine Manager and the new AppController (formerly code-named Project Concero). Rahi emphasized that System Center can manage Hyper-V and VMware VMs (and will manage Citrix XenServer VMs in the next version), plus it can manage physical assets and applications.

“[VMware stops] at the VM level,” he said. “They do not go below that. They’re trying to catch up, but they’re not there.”

System Center products such as Operations Manager, Configuration Manager and Data Protection Manager can be especially lucrative in Hyper-V deployments, said Rand Morimoto, president of Microsoft partner Convergent Computing.

“With the addition of System Center on top of the whole virtualization stack, that’s where the real value comes in for customers,” he said in an email.

When customers upgrade their Microsoft applications, it can be another opportunity for partners to pitch Hyper-V.

“VMware customers, they’re hard to budge,” Morimoto said. “However, we have been successful breaking into several hardcore VMware customers with Hyper-V implementations in recent Exchange 2010, Lync 2010 [and] SharePoint 2010 rollouts.”

Microsoft will give more details on Hyper-V Replica and Windows Server 8 at its BUILD conference, Sept. 13-16 in Anaheim, Calif.

Let us know what you think about the story; email Barbara Darrow, Senior News Director at, or follow us on twitter.

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