Microsoft Delivers Surprise Early Challenge to VMware

We’re all used to hearing from Microsoft (NASDAQ: MSFT) that big software releases will come later than promised, so it was a bit of a shock yesterday when the company said its “Hyper-V” virtualization technology—a part of Windows Server 2008 originally expected early next year—is ready for evaluation now. The news took some of the wind out of virtualization leader VMware’s (NYSE: VMW) sails on the stock market yesterday, lopping about 6 percent off the EMC subsidiary’s share value before it rebounded to a $96 close. (It was up another $2-plus this morning.)

Virtualization technology, which allows a single computer server to run several “virtual” operating systems simultaneously, saves corporations money by helping them to consolidate their business applications onto fewer machines. VMware’s feature-rich virtualization systems have a large lead in the virtualization market, but other companies have been sneaking up behind with software built around the Xen open-source scheduler, or “hypervisor,” including offerings from Oracle, Virtual Iron, and Citrix’s XenSource. It’s not known whether Microsoft’s Hyper-V, formerly called Viridian, is based on Xen.

“Delivering the high-quality Hyper-V beta earlier than expected allows our customers and partners to begin evaluating this feature of Windows Server 2008 and provide us with valuable feedback as we march toward final release,” Bill Laing, general manager of the Windows Server Division at Microsoft, said in the company’s product release announcement.

As we’ve noted before, VMware has a loyal user base adamant that none of the alternatives match its feature set—which is helping VMware keep prices for its software high. Others, though, say they can get most of the features they need from the less costly systems. The surprise release of Hyper-V will give businesses a chance to evaluate Microsoft’s virtualization option earlier than expected—and could perhaps lead to some firms to postpone purchasing decisions as IT managers who already run Windows Server environments try to decide whether using Microsoft’s built-in virtualization is easier (and cheaper) than adding or switching to VMware’s system.

The final version of Hyper-V still isn’t expected until next year, sometime after the slated February 27 release of the finished version of Windows Server 2008.

Wade Roush is a freelance science and technology journalist and the producer and host of the podcast Soonish. Follow @soonishpodcast

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One response to “Microsoft Delivers Surprise Early Challenge to VMware”

  1. samwyse says:

    You do know that Microsoft first said that they’d ship their hypervisor beta in the first half of 2007, then changed that to the second half of 2007 and then delayed it again to the first half of 2008? So the “earlier than expected” is really six months later than initially promised.