One of the most important technologies on Microsoft CEO Steve Ballmer's mind at Wednesday's launch of the company's new server products wasn't really in attendance.
In fact, Microsoft is still 180 days from releasing its server virtualization technology its Hyper-V hypervisor.
"We're not the leader in server virtualization," Ballmer told the audience at the company's "Heroes Happen Here" server launch event in Los Angeles. That doesn't mean that he isn't deeply interested in Microsoft becoming the leader.
Microsoft staged the event to formally launch Windows Server 2008, Visual Studio 2008, and SQL Server 2008.
A hypervisor is a small, specialized operating system that sits directly on top of the server hardware and lets the server run more than one operating system above it, each within its own virtual machine (VM). Microsoft shipped the first full beta test version of Hyper-V formerly codenamed "Viridian" in December.
The company plans to make Hyper-V a standard component of Windows Server 2008 when it is finally available.
However, that delay, analysts say, gives Microsoft's main competitor in the market for virtualization products, VMware, not just a six-month technology lead over Hyper-V. It also gives VMware more time to cement its name into customers' minds as the leading vendor of hypervisor technologies.
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Owned by EMC, VMware has been the leader in the market for hypervisors for years with its ESX line. In some respects, that means that Microsoft is the underdog, not only entering the competition late, but also not being the first in customer mindshare.
How Microsoft hopes to rout its competitors, however, is via the same route that it took in defeating the Netscape browser in the mid-1990s by bundling the software with the operating system and not charging extra for it.
In this case, the operating system is Windows Server 2008 and the price, while not absolutely free, is nearly so -- only $28. Actually, the way it's structured is a customer can purchase editions of Windows Server 2008 without Hyper-V and those will cost $28 less than the regular edition that include it.
On stage, Ballmer lamented the fact that, despite all the interest in hypervisors, only some five percent of all servers worldwide are running virtualization technologies today.
"We want to democratize virtualization. It should be on 90 percent or 100 percent of servers, and not just five percent," Ballmer said.
The burgeoning interest in virtualization is being driven by the need for IT shops to cut budgets and reduce the number of personnel required to manage corporate workloads. One of the easiest ways to do that, proponents argue, is to virtualize servers in order to consolidate multiple applications onto fewer servers.
Although virtualization solves the problem of too many servers, it also creates a new problem, say analysts. "The big thing is how do you manage the library of virtual machines that result," Michael Cherry, lead analyst for operating systems at researcher Directions on Microsoft, told InternetNews.com.
"In the end, I think it's going to come down to who can provide the best management tools," Cherry added. That is, tools for managing all of those VMs will be an important consideration for customers thinking of going virtual.
"That's exactly correct," Charles King, principal analyst at researcher Pund-IT, told InternetNews.com. "The hypervisor is the foot in the door [but] it's the sophistication and the ease of use of the management solutions that determines who wins," King added.
In that regard, Ballmer touted the company's System Center Virtual Machine Manager. "We can convert physical servers into virtual servers using this tool," he said. A version of the tool that adds support for Hyper-V is scheduled to ship at the same time as Hyper-V goes gold.
Still, Microsoft is not the only one with VM management tools.
VMware launched new VM management tools of its own at its first VMworld Europe 2008 conference in Cannes, France, on Tuesday. At the same time, VMware executives announced that HP, Dell, IBM, and Fujitsu-Siemens will ship VMware's ESX 3i hypervisor pre-installed on their servers this spring.
Since the hypervisor is lower in the software stack on the server than the operating system (i.e., Windows Server 2008) it could actually help stave off Microsoft's penchant for dominating a market through bundling, both analysts said.
"VMware is pretty well-positioned to continue to innovate at a fairly rapid rate, so it can probably stay ahead of Microsoft for a period of time," Cherry said.
This article was originally published on InternetNews.com.