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Virtual Server 2005 set for launch

Margie Semilof, Senior News Writer

Microsoft's entry into the virtualization market next week is viewed by some experts as more important than the technology itself.

Virtual Server 2005 will be introduced next week and will begin shipping later this month, according to Microsoft executives. As previously promised, there will be two versions: a Standard Edition, which sells for $499, and an Enterprise Edition, which will cost $999. They will be licensed per physical server, Microsoft said.

… it's not the technology that's so important here. Rather, it's Microsoft playing the game.

Jonathan Eunice,

Illuminata analyst

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The product can be used in several ways, including test and development environments, to run legacy applications on new hardware, for workload consolidation and in disaster recovery operations, where customers want to reduce their number of physical servers.

Virtual Server 2005 is based on technology purchased by Microsoft from Connectix Corp. in February 2003, and was reportedly in beta at that time. Customers and other partitioning vendors have been waiting a long time to see what will Microsoft deliver.

Though it's significant when Microsoft enters any market, this time it's competing against the well-established VMware Inc., of Palo Alto, Calif., which has far more depth in its product line, said one expert.

"Microsoft has something much shallower, with an unproven capability," said Jonathan Eunice, a principal analyst at Illuminata Inc., a Nashua, N.H., consulting firm. "But it's not the technology that's so important here. Rather, it's Microsoft playing the game. They validate the virtualization market."

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The real trick for Microsoft will be in developing a virtualization-friendly licensing plan, Eunice said. The software maker is a longtime proponent of having only one operating system on a single machine. In a virtualized world, customers are sometimes putting four, six and even 12 OSes on one computer, he said. "And most users won't be comfortable paying for the software infrastructure 12 times over," he said.

Regardless of what customers pay for Virtual Server 2005, they still must pay the cost of the OS and other infrastructure components. "If the software environment isn't amenable to virtualization, then other opportunities like Linux or Sun [Microsystems Inc.'s N1] Grid Containers look more attractive from a bottom-line perspective," he said.

Technologies such as VMware, which was acquired recently by EMC Corp., offer some advantage in that they support operating systems other than Windows, and there are plenty of other companies that offer a consolidation approach. Basically, the company has a technological approach to offer customers, but it comes without the cost savings from the software, Eunice said.

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