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"I don't understand the value yet," said Kevin Houston, virtualization practice manager and business development manager at Optimus Solutions, a Norcross, Ga.-based solution provider and partner to both Microsoft and VMware. "It still sits on top of a host OS, and it's utilizing the host OS's resources. I'm not sure of what value Hyper-V offers over Microsoft Virtual Server."
But that's a misconception, says Neil, who notes that Hyper-V sits below all of the operating systems running on the system. "It's the lowest layer of the software, and is the new foundation of the Windows environment," Neil said. In contrast, ESX has its own OS environment that's derived from Linux and runs within a partition to provide basic functionality, Neil said.
Some Microsoft analysts have speculated that the vendor plans to compete with the likes of VMware by commoditizing the virtualization layer and making its money from management and licensing.
But Bill Hilf, general manager of platform strategy and Windows Server marketing, insists that the business model around virtualization isn't disruptive to Microsoft's overall licensing business model. "If Windows is the host OS, or is being virtualized as a guest OS, nothing radically changes with our licensing," he said.
Of the three Windows Server 2008 SKUs that come with Hyper-V, Windows Server 2008 Datacenter includes unlimited virtual instances per license, Windows Server 2008 Enterprise includes four virtual instances per license, and Windows Server 2008 includes a single virtual instance per license, Hilf said.
Ultimately, since Microsoft owns the Windows Server market, they don't have to worry that much about competition in server virtualization, says Ron Herardian, president of Global System Services, a Mountain View, Calif.-based solution provider.
"They're going to introduce virtualization as a feature of Windows, and that will make the other virtualization technologies less relevant for companies that have Microsoft based infrastructure," he said.
Microsoft also plans to launch the next version of System Center Virtual Machine Manager in the second half of 2008, with a beta due in the first half of the year. This release will allow users to quickly provision and configure new virtual machines, and manage virtual machines running on Hyper-V, Microsoft Virtual Server 2005 R2, VMware ESX Server and Virtual Infrastructure 3 (V13).
Additional reporting by Joe Kovar