Microsoft Is Unveiling Virtualization Strategy Today

Microsoft is getting into the Virtualization game this week. Looks like it's a combination of acquisition (Calista Technologies), tweaking of licensing (it's so complicated these days fro large enterprises I'm not sure what this really means), and it won't be ready for 6 months. Hmmm. Another release of announcement-ware designed to sell their current OS? I can hear the resellers now... ' If you buy Vista today you can virtualize in 6 months, which gives you enough time to figure out our licensing programs...'



http://online.wsj.com/article/SB120093762351904643.html?mod=googlenews_wsj

Microsoft Corp. this week is disclosing new details of its plans to take on VMware Inc. and others in a hot field called virtualization.

The software giant's moves include the purchase of a Silicon Valley start-up called Calista Technologies Inc. Terms of the purchase aren't being disclosed.

Microsoft is also relaxing some licensing policies to allow use of virtualization software with more versions of its Windows Vista operating system and is lowering some fees associated with using the technology.

The company plans to offer a virtualization component with its coming Windows Server 2008 operating system, which is scheduled to be delivered this quarter. But the feature, known as Hyper-V, won't be ready for six months, or sometime in the third quarter, said Larry Orecklin, general manager of Microsoft's server-infrastructure business.

Virtualization isolates a computer's hardware from key pieces of software, bringing such benefits as the ability to run multiple operating systems simultaneously on one computer. The technique, pioneered by International Business Machines Corp. in the 1960s, has become popular for exploiting unused computing capacity on low-end server systems.

The technology is also moving to desktop PCs such as Apple Inc.'s Macintosh, which can use virtualization software to run both Microsoft's Windows and the Macintosh operating system. In the future, technology companies hope to make it easy to transfer bundles of application programs and operating systems -- sometimes called virtual machines -- from computer to computer to be processed most efficiently.

Virtualization specialist VMware, which is majority-owned by EMC Corp., completed a successful initial public offering last year. It now boasts a market capitalization of more than $31 billion.

Microsoft offers some virtualization components already. But it doesn't yet offer a key layer of software, called a "hypervisor," that emulates the physical features of a computer and runs beneath an operating system. Hyper-V is expected to add that capability.

In the meantime, the company has been stressing the battle is just starting -- a similar theme to one the company used when it charged belatedly into markets such as Web browsers.

"Although virtualization has been around for more than four decades, the software industry is just beginning to understand the full implications of this important technology," writes Bob Muglia, senior vice president of Microsoft's server and tools division, in an email Microsoft is distributing to customers this week.

Frank Gillett, an analyst at Forrester Research, said Microsoft is "using the same playbook" it used in the Web-browser wars, when it eventually overwhelmed rival Netscape Communications Corp. He doesn't think VMware has much to worry about for two years or so, though, because its products are so well entrenched in corporate computer rooms.

"What we have been developing over the last seven years is what Microsoft is just starting to think about," said Raghu Raghuram, vice president of products and solutions at VMware, based in Palo Alto, Calif.

Microsoft had irked some virtualization suppliers by adding language to the licensing agreements for two consumer versions of Windows Vista that barred the use of virtualization. More-costly versions of the software, sold primarily to businesses, weren't covered by the restriction. But Microsoft has now decided to allow use of virtualization on the two consumer versions, Windows Vista Home Basic and Windows Vista Home Premium. VMware's Mr. Raghuram said he welcomed the change.

"We had to work pretty diligently to convince them of the error of their ways," added Woodson Hobbs, chief executive officer of Phoenix Technologies Ltd., another company that recently entered the market for virtualization technology.

Microsoft also is lowering the annual fee it charges for running Windows in virtual machines on servers while accessing them from PCs that are covered by a subscription program called software assurance. The estimated retail price for an annual subscription to what the company calls Windows Vista Enterprise Centralized Desktop is now $23 per desktop machine, down from $78, the company said.

Calista, a closely held company based in San Jose, Calif., makes software that helps run a user's desktop computing environment remotely on a server system. Microsoft is also announcing cooperative moves with a bigger company that offers similar technology, Citrix Systems Inc. Citrix, which recently bought the virtualization software maker XenSource, is developing technology to help customers transfer virtual machines between Citrix's XenServer product and Windows Server 2008 with the Hyper-V technology, Microsoft said.