It's VM-War: Microsoft, VMware Fracas Continues With Lock-In Warning Letter

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The strategically placed ad, which took the form of an open letter to VMware customers, hit print on Tuesday, the day VMware kicks off its annual VMworld conference in San Francisco.

"VMware is asking many of you to sign 3-year license agreements for your virtualization projects," Brad Anderson, corporate vice president with Microsoft's server and tools business wrote in the ad. "But with the arrival of cloud computing, signing up for a 3-year virtualization commitment may lock you into a vendor that cannot provide you with the breadth of technology, flexibility or scale that you'll need to build a complete cloud computing environment."

Calling cloud computing the "biggest opportunity in decades" for businesses to become more agile while also cutting costs, the open letter continued, adding that virtualization, while an important part to cloud computing, is merely a stepping stone.

"... If you liked the efficiencies and cost savings of virtualization, you'll love the cloud," Anderson wrote in the advertisement.

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"If you're evaluating a new licensing agreement with VMware, talk to us first," Anderson wrote in the letter. "You have nothing to lose and plenty to gain. Not only is Microsoft's server virtualization solution approximately one-third the cost of a comparable solution from VMware, but also a recent Microsoft study of 150 large companies showed those running Microsoft virtualization spent 24 percent less on IT labor on an ongoing basis. More importantly, as you build out the next generation of your IT environment, we can provide you with scalable worldwide public cloud computing services that VMware does not offer."

The letter comes as Microsoft plans to exhibit at VMworld 2010, though Microsoft won't showcase its virtualization technology at the event because VMware purportedly prohibits exhibitors from demonstrating competing products.

The USA Today open letter to VMware customers at the start of VMworld is the latest in a vicious back-and-forth between the two tech powerhouses that often erupts as VMworld nears.

In 2009, Microsoft felt shunned at VMworld and complained when the company was relegated to a small 10x10 booth at the event. Citrix also felt slighted. Both companies had much more booth space in 2008, when Microsoft and Citrix were VMworld gold sponsors. At the time, Microsoft was also vocal about not being able to demonstrate some of its latest virtualization technologies at VMworld 2009.

The booth brush off was believed to be VMware's revenge against Microsoft for handing out poker chips inviting VMware customers to switch to Hyper-V at the previous year's event, VMworld 2008.

The VMworld battle aside, Microsoft and VMware have continued to butt heads in the cloud computing and virtualization spaces. The rivalry has grown over the years as Microsoft tries to wedge into VMware's wheelhouse with its Hyper-V hypervisor offering and VMware adds more functionality to its server software where Microsoft has traditionally ruled.

At Microsoft's Worldwide Partner Conference (WPC) in July, Microsoft COO Kevin Turner in his keynote called VMware another "high-priced competitor," and said that VMware has many customer contracts coming up for renewal, which gives partners who work with Microsoft's Hyper-V an opportunity to get the foot in the door.