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No one would mistake Microsoft's server virtualization software team for a smooth operator. The group managed to change its stance on two issues during last week's Intel Developer Forum (IDF) event, telling customers they'll have to pay for an update to Virtual Server 2005 and shifting the release date for revamped virtualization software for the "Longhorn" Server operating system.

In the fourth quarter, Redmond will pump out Virtual Server 2005 R2. Customers will have to cough up an undisclosed fee for this upgrade instead of obtaining it as a gratis maintenance release, as once planned. A Microsoft rep bragged that beta testers were wowed by the quicker code - a possible reason for putting out the pay-to-play upgrade.

"The latest release of Virtual Server has made significant performance gains," said Mike Neil, product unit manager for Virtual Server at Microsoft, during a session at IDF in San Francisco. "Overall, customers are finding that Virtual Server R2 has significantly reduced their CPU overhead."

Such improvements would certainly be welcomed given Virtual Server's rather lackluster reputation in the server virtualization market. At present, EMC's VMware division holds the clear market share lead and receives ample praise for running multiple copies of Linux or Windows on the same server or workstation well. XenSource - the major company shepherding the open source Xen virtualization package to market - is a new entrant in the space and has yet to secure any major customer wins or at least to tell anyone about them.

Microsoft too remains reticent to divulge how many firms buy Virtual Server - a product acquired from Connectix in 2003 and punished by the same delays that haunt so many Microsoft efforts

"Microsoft has a very broad user base," Neil said in answer to our question about the size of the Virtual Server customer list during a panel session. "There are 5,000 customers in our beta program right now."

How many of those customers pay for the product in the end?

"We don't go into specifics on sales information."

By contrast, VMware boasts thousands of paying enterprise customers.

Need a case of VS?

Should you go ahead and pay for the Virtual Server 2005 upgrade? Maybe not.

In the second half of 2006, a product likely called Virtual Server 2006 will ship with support for Intel's Virtualization Technology - said to make the basics of creating a virtual or abstracted software layer much easier. In addition, that OS will have support for Linux guest operating systems.

Then, Microsoft plans to release a new hypervisor form of virtualization software that will replace Virtual Server. Up to this point, Microsoft had indicated most strongly that the hypervisor would appear in an update to Longhorn server - sometime in 2009 or, god forbid, even 2011.

Neil, however, admitted that would be an awfully longtime for customers to wait and expressed his wish that the hypervisor slide right into Longhorn's release in 2007.

"I'm certainly hoping it will not be until 2009," he said.

"From our perspective, we have to be very careful. It is the lowest layer of software in the component stack. It is something we want to make sure we do well and do right."

Neil added that the hypervisor will likely be in beta for close to one year. ®

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