Microsoft starts supporting, er, Linux

One thing to keep in mind is that Microsoft does not really have an answer to VMware's high-end ESX Server product at this time. It won't until the hypervisor-based product comes out near the end of the decade. So, er, VMware has a big cushion.

However, Microsoft's moves and the increasing traction of the free, open source Xen hypervisor are going to make life more difficult on VMware, particularly in the large Windows market.

"With so many free, near-free, and built-in product out there, it's going to be increasingly tough for a standalone virtualization company to make money - especially if you look out 18 months or so," Illuminata analyst Gordon Haff told us.

And that brings us to the third bit of the puzzle.

Microsoft uses something called the Virtual Hard Disk file format to capture virtual server images and pass them around physical boxes. It happens to have licensed this technology to open source specialist XenSource - the leading user of Xen.

Microsoft has not granted a similar license to VMware for rather obvious reasons, and VMware is not too happy with the direction things are taking.

So, VMware announced today that it has opened up its own virtual machine disk format and made it free of charge. "The virtual machine disk format specification describes and documents the virtual machine environment and how it is stored," the company said. "Patch, provisioning, security, management, backup and other infrastructure solutions for virtual machine environments all heavily depend on the virtual machine disk format. Based on this dependency, having an open and unrestricted virtual machine disk format is critical to the broad-based development of new solutions and value-add for virtual environments."

VMware's chief Diane Greene went so far as to start a new blog just to have a go at Microsoft's manoeuvering on the file format front.

Today's moves show quite clearly that Microsoft knows it has an inferior product at the moment and needs to stop customers from defecting to VMware and Xen and to stop potential customers from experimenting with the rival virtualization packages. Without a hypervisor-based product, Microsoft can't come close to matching Xen on performance and it's years behind VMware from a product maturity standpoint. Microsoft can really only cater to mid-market customers, which happens to be a huge market in the Windows arena.

With all the delays around its server virtualization products, Microsoft had to do something drastic. And, in fact, its move to free is the biggest blow against VMware's lucrative model to date - at least from a marketing standpoint.

VMware, however, still brings in more than $100m per quarter from its products, while Microsoft and XenSource bring in a few bucks here and there.

You can tell that VMware has become a major target for Microsoft and Xen and one that they're willing to go after together.

If you weren't paying attention to server virtualization, today's announcements should wake you up. Another battle for your operating system is on in a massive, massive way. And it's getting ugly quick.

You can find out more about Microsoft's moves from the Beast itself over here. ®