Microsoft Jockeying For Position In Virtualization Race

To make this happen more quickly, Microsoft is making strategic maneuvers behind the scenes, from desktop licensing scenarios down to server licensing scenarios, that are aimed at commoditizing virtualization technology, said Jaymes Davis, virtualization practice manager at Entisys, a Concord, Calif., solution provider.

Support is one of the most important factors that play into pricing for virtualization, said Davis. "The way the virtualization market runs is based on the level of command and support, and whether you have an Enterprise Agreement with Microsoft," said Davis.

"I have people who have Microsoft agreements that because Systems Management Server comes as part of their agreement, and if they perceive it to be free, they'll use it," said Davis. "If Microsoft allows for free virtualization as part of their agreement, companies are going to use it as well. And that's when the commoditization of virtualization will become a foregone conclusion," added Davis.

Microsoft made a play two years ago to standardize on the Virtual Hard Disk (VHD) Image Format Specification, which refers to a virtual machine hard disk that can reside on a native host file system encapsulated within a single file, noted Davis. "The idea behind this was that you'd have interoperability of virtual environments as well as platform independence," he said.

"When Microsoft got into Xen's community, they saw that Xen is now being integrated into many platforms, including Solaris and Red Hat, which shows that the format is now interchangeable between multiple different virtual platforms," Davis added.

This is proof positive of a play that highlights Microsoft's plans to push for the commoditization of virtualization, said Davis.

"Viridian will take advantage of the same format that everyone using now and apply it so that everyone can manage using multiple different management platforms. For Microsoft, if they can control the container, it's all about the OS that's inside," said Davis.

Other solution providers believe that cost isn't necessarily a primary motivator for companies looking to add virtualization.

While some VMware competitors market products similar to ESX Server at a lower price, VMware is perceived as the most mature product on the market, and customers are willing to pay a significant amount more to go this route, said Greenpages' Ward.

"Customers don't necessarily take price into consideration when it comes to virtualization, probably because they're not as concerned due to ROI of virtualization and the amount of money they save from not having to buy new hardware," said Ward.

However, Morimoto insists that pricing is, in fact, one of the main benefits of going with Microsoft virtualization.

"The point where licensing costs come into play is that Microsoft Virtual Server is a free download, whereas VMware ESX Server is not free," said Morimoto. "And if an organization plans to cluster their servers, which is pretty common these days for high-availability environments, Windows clustering services comes with Windows Server R2 Enterprise and Datacenter at no additional charge."

When Viridian does arrive, Microsoft may find that organizations that have already chosen a virtualization vendor aren't willing to switch just because Microsoft has a cheaper product, according to one East Coast Microsoft Gold partner.

"Microsoft's opportunity will be with those that haven't yet made substantial virtualization investments. They're not going to go into organizations with VMware and convince them to change at this point," said the source, who requested anonymity.

The Channel's Role In Virtualization
Meanwhile, as the hype around virtualization builds, solution providers say it's crucial to explain to customers what the technology can and can't do.

"We've seen customers try and take a dedicated SQL Server and make it into a virtual server, and then add terminal services as one of the virtual servers," said Steven Mulka, a partner with SIS, a Duluth, Ga., solution provider. "But do you want terminal services running on a virtual server environment? No, because that's not the best utilization of the virtual server application."

However, when properly designed, virtual server technology will become key to a company's network infrastructure in the future, noted Mulka. "Utilizing larger, properly designed servers—much like the old mainframe scenarios where the large servers were doing the bulk of the work—can be a beautiful concept," he said .

Orecklin says the fact that Microsoft's virtualization portfolio will extend from the desktop all the way to the data center means there will be opportunities for the vendor and its partners to build applications in between. Other important factors that come into play and determine the value that partners provide in virtualization are the strong customer relationships they have, according to Orecklin.

Solution providers with skin in the virtualization game say they're making money from the integration and configuration services for virtual servers that are necessary for optimal performance, said Knijnenburg. "We also make money on integrating Virtual Server into a SAN environment, which is one area where the product works very well. The physical host doesn't have to have a lot of disc space, just memory and processing power tied back to a SAN," he said.

Rick Opal, vice president at Peters & Associates, a Gold partner in Oakbrook Terrace, Ill., says demand for higher-end virtualization features is relative to the customer size and the problems they're attempting to solve.

"Virtualization in general is hot, and frankly, we have a lot of customers who are anxious for Windows Server 2008 [and Viridian]. I think after it launches, we're going to see serious momentum for services and consulting around virtualization," Opal said.

"Sure, Microsoft will have some ground to make up, but when they ship Windows Server 2008 and Viridian, what customers will have to look at is what they natively get with the Microsoft stack, as opposed to the value proposition outside the stack," said Opal.

While VMware once had a head start on the strength of higher-end virtualization features, that advantage is quickly fading, said Morimoto. "A year ago, I'd have said that Microsoft was three years behind VMware. But in the past year, they've made up a lot of ground, and for a lot of the things people care about, it's pretty close now," he said.