Microsoft Bolsters Virtualization Initiative

Microsoft on Monday announced a number of new initiatives related to virtualization that the company hopes will bolster its competitive position against market leader VMWare. Microsoft is purchasing a virtualization company, strengthening a corporate partnership, and easing virtualization licensing in Windows Vista to make its products more competitive.

"Very few customers are able to reap the benefits of virtualization today," says Microsoft senior vice president Bob Muglia. "We estimate that less than five percent of companies are utilizing virtualization technology because it is simply too cost-prohibitive and complex."

To address these problems, Microsoft has unveiled a number of changes to its virtualization strategy. It has purchased a small startup, Calista Technologies, and will broadly deploying that company's virtualization technologies and intellectual property into its own products. It has also announced an expansion of its partnership with Citrix, which will use Microsoft's Hyper-V virtualization technologies in a new generation of server-based solutions that will ship this year.

Most newsworthy, in some ways, Microsoft has dramatically eased the licensing of Windows Vista in virtualized environments. Corporate licensing of Vista through the Windows Vista Enterprise Centralized Desktop (VECD) has dropped from $78 a year to $23. And Microsoft has ended a restriction that prevented users from installing consumer-oriented versions of Vista in virtual environments. Now, Vista Home Basic and Home Premium can be legally installed in virtual machines, joining the business-oriented Vista Business, Enterprise, and Ultimate editions.

Microsoft still faces many hurdles in the virtualization market. VMWare maintains a lead that is several years deep, and it offers products and services that Microsoft won't be able to match any time soon. Microsoft's most impressive virtualization offering to date, Hyper-V, will ship as an add-on for Windows Server 2008 sometime in mid-2008, the company says, about 3 months after Windows 2008.