VMWare Counters Oracle, Microsoft With Free Update

The new offering comes amid a rapid move by VMWare competitors, including Oracle and Microsoft, to capitalize on the virtualization technology boom driven by VMWare. On Monday, both Oracle and Microsoft announced virtualization offerings, sending Vmware shares down 8 percent or $7.38 to $80.36.

Oracle's Monday unveiling of a virtualization product it claims is three times more efficient is seen as the gravest threat to the VWware virtualization franchise. Customers can download "Oracle VM" for free starting on Wednesday, the company said. Oracle will sell service contracts for the product ranging from $499 to $999 per year.

Microsoft, also got into the act by announcing its server virtualization technology known as Hyper-V. Microsoft will ship a beta version of Hyper V along with Windows Server 2008. Then, in the second half of next year Microsoft will push out the final version of Hyper V through Windows Update.

What's more, Citrix, which has played in the virtualization market, completed its acquisition last month of Linux open source software virtualization provider XenSource.

Sam Haffer, president and co-CEO of Computex, one of the largest VMWare partners in Texas, said the chances that Linux wannabes like XenSource or even software giant Microsoft can knock VMWare off the top of the virtualization pyramid are slim to none. He said his VMWare business is up over 100 percent this year.

"VMWare has gone public and is flush with money," said Haffar. "There is always going to be competion, but there are the leaders and the laggards and VMWare is the leader."

Haffar said VMWare is at least two to three years ahead of all comers with its technology. In fact, he said, VMWare has moved beyond a virtualization product into a higher realm of disaster recovery with its VMotion technology

"VMWare is no longer just a server consolidation company," said Haffar. "VMotion technology is very important. No one else has that. Now with VMWare I can move an application from one server to another live server that is hot and while the application is up and running move it from one virtual machine on one server to another virtual machine on another server." What that means is in the case of a disaster an application running on a VMWare server can be moved instantly to another server instantly, keeping the application up and running, preventing a disaster recovery scenario, said Haffar. It also makes upgrading servers with new memory much easier, said Haffar.

VMware said its new Server 2 free offering includes a new intuitive Web-based management interface and supports more than 30 flavors of operating systems including various Linux distributions, Windows Server 2003, Windows Server 2008 (beta) and Windows Vista.

VMWare said more than 3 million copies of VMware Server have been downloaded to date, with some 70 percent of these downloads coming from companies typically categorized as small and medium businesses.

VMware said the free offering, similar to those offered by Linux open source software providers, is a popular way for new customers to evaluate and begin using VMware software. VMware Server 2 is available as a public beta download at VMware's web site.