Microsoft surprised itself this week by delivering a delayed beta of its Hyper-V virtualization software, less late than once expected.

Confused? Don't feel bad - even Microsoft is struggling to get to grips with what's going on.

In a press release earlier this week, Microsoft bragged:

Microsoft Corp. this morning delivered a holiday surprise for customers and partners, unveiling a public beta for its hypervisor-based server virtualization technology called Hyper-V, a feature with some versions of Windows Server 2008. Customers and partners today can download Windows Server 2008 RC1 Enterprise with the beta version of Hyper-V to evaluate the new technology, test applications and plan future consolidation, business continuity and high-availability projects.

The beta was previously expected to be ready in the first quarter of 2008 with the release to manufacturing (RTM) of Windows Server 2008. The beta is available for download here.

Then, Microsoft's Server Division chief jumped in for some more back-patting.

"Delivering the high-quality Hyper-V beta earlier than expected allows our customers and partners to begin evaluating this feature of Windows Server 2008 and provide us with valuable feedback as we march toward final release,” said Bill Laing, general manager of the Windows Server Division at Microsoft.

This is all a bit hilarious to anyone covering this space closely. Microsoft, in fact, planned to ship the Hyper-V beta in the first half of 2007, then delayed the release to the second half of 2007 and then delayed the delayed release to the first half of 2008. So now Microsoft has beat out the target ship date of its most recent delay and met the target of its first delay, which in Redmond is enough of a good job to warrant a "holiday surprise" fanfare. (Let's also not forget that Microsoft has ripped out a number of Hyper-V features.)

Anyway, the Hyper-V software – code-named Viridian – will give Microsoft a true competitor to VMware's ESX Server software and the Xen-based products from companies such as Citrix and Virtual Iron. The software will replace today's unimpressive Virtual Server software and ship either as a standalone package or with various flavors of Windows Server 2008.

The standalone product will cost $28 – a price seemingly designed to help Microsoft avoid any anti-trust grumbles that might have arisen if it gave away the software.

Most of the major virtualization players now give away some form of their flagship virtualization products. Often, they limit the free package to smaller server configurations, or give away the base hypervisor that handles core virtualization tasks and then charge for management software.

Microsoft's entrance into the market has a number of analysts and reporters speculating that VMware will lose large amounts of revenue. (Forbes managed two stories on Microsoft's surprise: "Microsoft scares VMware" and "Microsoft Declares War on VMware". In actual fact, this was the same story with two different headlines, and the piece contained heroic amounts of disinformation.)

VMware charges between hundreds of dollars and thousands of dollars per socket, depending on the configuration, for the standalone version of ESX Server. Thing is, less than 20 per cent of VMware's revenue comes from standalone hypervisor sales. The company makes the vast majority of its money selling the VMware Infrastructure suite that includes the hypervisor along with a host of management tools.

Microsoft has a lot of work to do before it can match VMware's management bits. For example, Hyper-V will not ship with a complementary package for shifting virtual servers between physical servers, as you'll find today with VMware's VMotion and Citrix's XenMotion. As we understand it, most of the virtualization customers out there today consider this type of software essential.

Those of you who want full details on obtaining and using the Hyper-V beta should pop over here.

Maybe in 2008 Microsoft will really wow us with a holiday surprise by shipping a complete product on time. ®

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