...cost to the customers, you can give the flexibility to the customers, [and] it enables mass adoption.
So that is it. We have a large portfolio of products, and a combined physical-and-virtual infrastructure in one that is offered at [the right] price point.
VMware is the undisputed market leader in virtualisation but, as a company, it came from nowhere to reach that position. Do you think Microsoft missed a trick there?
If you look at how we do investments, you know that we do not have to be the first in the market in anything. If you look at the server virtualisation market — the more mature side — less than 12 percent of servers are virtualised. Eighty-eight percent are not. The market is still waiting to happen.
The model before we came in was high-priced and complex virtualised solutions. You were talking $10,000 [£5,800] a server or $3,000 a server. It's too expensive, so the market is 12 percent. Now by democratising the market for virtualisation — by making Hyper-V free, managing the servers so physical and virtual are one and so on — that, in our opinion, is a model for adoption of virtualisation.
And we are seeing that. We have been in the market for 100 days, and we are already seeing large companies deploying our technology who in the past would have gone VMware. Choice is always good for customers. Competition. That is what we are bringing into the market.
And instead of playing 'my hypervisor vs VMware', we decided we're going to leapfrog VMware. The way we are going to leapfrog them is through our management solutions. So you can manage the physical and virtual infrastructure, instead of the old model, where you could manage just the virtual structure.
Our management products and our hypervisor are open, so that others can manage it and we can manage others. That way you get heterogeneous interoperability, [sas opposed to] VMware's model, where they only manage themselves and keep it closed. Their customer value proposition is that once you have chosen VMware, you are stuck with VMware and you must pay the high prices of the vendor.
How is the partnership with Citrix — which has its own virtualisation offering, Xen — working out?
They are a big part of our virtualisation business. They have a technology that we would like: a connection broker. On the server side, [it's] the same thing, where Microsoft and XenSource are working together. We are doing things so our hypervisor can manage their systems, and vice versa.
We are going manage XenSource through our [System Centre] Virtual Machine Manager down the road. And with the current, new version of Virtual Machine Manager, we are going to manage VMware.
Our partnership with Citrix has been decades long and is going to continue [to be] strong. With partners, it is a matter of Microsoft DNA. The ecosystem is what we work with. If you look at the client, if you look at the server, if you look at any aspect of our business, we are working with partners and building the industry together.
We work with the ecosystem of partners, and that is why we have hundreds of thousands of partners. That model doesn't change.
There has been much speculation that you will buy Citrix, primarily to get your hands on XenSource. That's not on the table?
I can't speculate on that. As a company, we look at things and we buy technology sometimes and we work with companies. We have been working with Citrix for more than 10 years. And we have a partnership.
And they are just a partner?
A very close partner. We have been working with Citrix for over a decade.
Do you think the emphasis on virtualisation, which has been on the server so far, is beginning to switch more towards the client, which should be Microsoft's strong suit?
It is one of the big changes that is coming into IT. Not just client, not just server, but the way that datacentres are going to be managed. Virtualisation is going to be underpinning the whole foundation of technology.
