Microsoft: Virtualization Party Just Getting Started

Microsoft may have arrived late to the virtualization game, but the software giant still sees mountains of opportunity in the nascent market. As it prepares to do battle with entrenched foes like VMware, Microsoft is highlighting the lower cost and advanced management capabilities of its virtualization offerings.

In a keynote speech Sunday at the opening of XChange '08 in Dallas, Texas, Dai Vu, director of virtualization products/solutions marketing at Microsoft, said with less than 10 percent of servers currently virtualized, the technology is just now entering the mainstream.

"Virtualization is ultimately going to be ubiquitous, and a core technology component in everything we do. We want to get to point where all workloads will be virtualized," said Vu. "We've only scratched the surface of where we're ultimately going to be headed."

In addition to server virtualization, Microsoft's portfolio includes desktop virtualization, application virtualization, and presentation virtualization.

Some channel partners have expressed concern over Microsoft's policy of requiring companies to sign licensing agreements to obtain certain virtualization components. Still, VARs say Microsoft's multi-pronged strategy gives them much-needed flexibility and is helping them tap into new opportunities.

"Desktop virtualization is very interesting, and I think it's going to give us a lot of new opportunities to go forward in the virtualization world," said Mark Mulawa, a partner at PMV Technologies, a Madison Heights, Mich.-based solution provider.

Bill Lopez, vice president of business development, West region, at Incentra Solutions, Santa Clara, Calif., thinks Microsoft is on the right track in virtualization. "It's good that they're focusing on all aspects of virtualization, and the universal management console is also going to be a key differentiator," he said.

Application Virtualization (App-V) version 4.5, currently in beta, is part of the Microsoft Desktop Optimization Pack, and is slated for launch later this year. App-V will improve Microsoft's ability to scale application deployment across larger organizations, according to Vu.

Microsoft is also trumpeting the versatility of System Center Virtual Machine Manager, a virtualization management solution lets organizations manage virtual resources and physical resources from a single interface, and also works with VMware's ESX.

"As virtualization becomes more pervasive, it's becoming increasingly important to manage physical and virtual resources together," said Vu. VMware recently started giving away its ESXi virtualization hypervisor for free, and Vu suggested that this decision was influenced by former longtime Microsoft employee Paul Maritz, who took over as VMware President and CEO in July. Vu said the move was somewhat deceptive, however, because customers still need to buy the rest of the VMware stack in order to leverage the solution.

"To do anything useful with VMware, you need the full stack of deployment, and that price didn't change. Microsoft virtualization is one third of the cost of VMware, and provides more value," said Vu.

Israel Lang, managed services director at NetGain Information Systems, a solution provider in DeGraff, Oh., says Microsoft has some "serious ground" to make up on VMware, but VMware is clearly circling the wagons over the pricing pressure Microsoft is wielding.

"VMware is using some of Microsoft's tactics as far as giving stuff away for free, but we'll have to see just how far up the stack they end up having to give away for free in order to build market share" said Lang. Steven Wolsefer, vice president of Fuller Computer Solutions, a Cincinnati, Oh.-based Microsoft partner, expects Microsoft to continue closing gap on VMware using price and management as its main talking points.

"Microsoft trails VMware in virtualization by a significant amount, but I think they're going to catch up pretty quickly. When Microsoft gets into a product area, they usually take it over pretty quickly," said Wolsefer.