The virtualisation specialists are fighting back.
Companies such as VMware and, more recently, XenSource, first made their names with standalone virtualisation software that let customers run several operating systems simultaneously on a single computer. But Linux sellers and Microsoft, unwilling to cede their influential position selling the foundational software of a computer, are trying to make virtualisation a feature of the operating system.
Now the virtualisation companies are trying to make their software a feature of the server instead. XenSource and VMware have both added new versions of their products that can be embedded directly in servers, and both companies have lined up major server makers who will build it in.
"With virtualisation, where you can run any operating system on top, it seems a lot more logical that it would be effectively a layer sitting on top of a server," said Illuminata analyst Gordon Haff. "Why wouldn't it be supplied with the server?"
XenSource announced XenExpress OEM Edition last week, and market leader VMware this week is announcing VMware ESX Server 3i at its VMworld conference. The products run from flash memory built into a server instead of being installed on the hard drive.
The embedded versions aren't just a fantasy. VMware has partnerships with IBM, Dell, HP, NEC and Fujitsu. "We expect them to begin integrating ESX Server 3i into their servers later this year or early next," a VMware representative said.
Likewise, XenSource has a partnership with a tier-one server company that will use its software, but XenSource won't announce which company until 30 days from now, said chief technology officer Simon Crosby.
The move has strategic importance in these relatively early days of virtualisation, elevating the profile of virtualisation specialists' products. Getting a foot in the door could help the virtualisation specialists reach customers who might be interested in higher-level products to manage the increasingly sophisticated computing infrastructure that can be built atop virtual machines.
Virtualisation has been around for decades, but its inclusion in mainstream computers with x86 chips is bringing it out of the shadows. And the money is following. In August, VMware, an EMC subsidiary, had a roaring initial public offering, and Citrix Systems bought XenSource for $500m.
But the foundational elements of virtualisation — in some cases called a hypervisor — aren't themselves likely to be a great money maker. Rather, it's the higher level.
"The hypervisor will come for free from multiple sources," said Forrester analyst Frank Gillett. "To me, it's not about what hypervisor you're using, it's about what ecosystem you're plugging into for management."
Management tools available today include VMware's Virtual Infrastructure, XenSource's XenEnterprise, Microsoft's System Center Virtual Machine Manager and Virtual Iron's Xen-based eponymous product. They are designed for tasks such as controlling what resources a particular virtual machine may use, backing up data or moving virtual machines from one machine to another in case of failed or overtaxed hardware.
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Just getting a hypervisor onto a server doesn't guarantee success for a virtualisation specialist. For one thing, server makers have their own management software to sell. For another, there's strong pressure to standardise virtual machine control interfaces so anybody's management software can work with anybody's hypervisor, Haff said.
Making the basic virtualisation software a component of an operating system, available at no extra cost, exerts price pressure on VMware's core products. But it hasn't been easy for operating-system companies to build virtualisation into their products.
Microsoft has yet to produce its first hypervisor, code-named Viridian and officially called Windows Server virtualisation. It's due to debut within 180 days of the first-quarter launch of Windows Server 2008, but in May, Microsoft lopped off some major virtualisation features to meet the deadline. (Microsoft does offer server and desktop computer virtualisation technologies, but it lets virtual machines run as "guests" on a "host" version of Windows, not on a hypervisor.)
Meanwhile, leading Linux sellers Red Hat and Novell's Suse both built open-source Xen into their server products, but in neither case was the technology mature, Haff said.
"Even though Xen has been part of [Linux products] for a while, it's really just now getting ready for prime time," Haff said. "VMware is still very much the dominant player in virtualisation."
