Microsoft to offer standalone hypervisor

Backing off earlier plans, company says customers will be able to buy the virtualization technology without committing to Windows Server.

Reversing earlier plans, Microsoft said Monday that it will sell its new virtualization technology separately from its Windows Server operating system, in addition to as a bundle.

The software maker said it still expects most people who ultimately get its hypervisor to do so as part of Windows Server 2008, but said the move will allow server makers to include the Hyper-V virtualization technology even on servers that aren't destined to run Windows.

Microsoft also announced that it will have eight versions of Windows Server, ranging from $469 for its Web server product to $3,999 for the data center edition. The software is set for a formal launch February 27, with the code due to be finalized early next year. The company will offer the Standard, Enterprise, and Datacenter versions of Windows both with and without Hyper-V, with the virtualization technology costing an additional $28. It will also sell the Hypervisor, formerly code-named Viridian, by itself for $28.

Illuminata analyst Gordon Haff said the move reflects Microsoft's adjustment to market realities.

"That's a really a complete reversal in position for Microsoft," Haff said. "Microsoft was very much in the 'virtualization is a feature of the operating system' camp. I think they've taken a look at reality and reality is basically not compatible with that view."

The hypervisor virtualization technology is seen as a key feature of Windows Server 2008, although the company did trim some features to avoid further delays. Virtualization is a broad term for technology that lets one computer act as many, while hypervisors refer specifically to a thin layer that runs on a server and allows multiple operating systems to run on the same hardware, handling functions like memory and storage management.

While the sale of hypervisors by themselves is not seen as a huge financial opportunity, control of that layer is viewed as strategically important, particularly for companies that want to sell management software and services tied to virtualization.

Today, less than 4 percent of servers are virtualized, even though less than a tenth of servers are running at even 10 percent of their capacity, said Andrew Lees, corporate vice president, Server & Tools Marketing and Solutions Group at Microsoft. Over time, more than half of servers will be virtualized, Lees said.

That will lead to a fundamental shift in how data centers are run. Today, he said, it's not uncommon to see servers with sticky notes, such as the blue machine runs enterprise resource planning software, while the green one runs e-mail.

"All of that will go away," Lees said. "In the future the data center is one blob. The only thing that knows what's running on what machine is the management software."

Haff said Microsoft is in a good position to get its revenue from the software and services needed to manage all that.

"Microsoft doesn't need to make money off the hypervisor, which is good because the hypervisor goes to very near zero in terms of cost over time," said Haff, who is a member of the CNET Blog Network.

As Microsoft was talking virtualization at its IT Forum in Barcelona, Oracle also made news at its Oracle OpenWorld show in San Francisco by announcing its own plans for virtualization.

"There are some similarities to what Microsoft is doing, although I think it is coming from a somewhat different mindset," Haff said. "They just want all of the software running on a server to be able to be from Oracle. If the server maker starts shipping a hypervisor as part of the server, I don't think Oracle especially cares."

Microsoft's primary competition in the virtualization world is industry leader VMware, and Lees noted two main areas where Microsoft is trying to set itself apart.

The first is in management software, where he said Microsoft has an edge by having software that not only can manage virtual machines, but also can handle physical servers as well as applications running within a virtual machine. That allows Microsoft's software, he said, to notice a poorly performing application and add additional resources, such as a new virtual machine, automatically.

"With VMware, they do a pretty good job of managing virtual machines," Lees said. "They don't do anything above it or below it."

Microsoft is also competing on cost. VMware can cost as much as $3,000 or $4,000 per processor, Lees said, with Microsoft costing just a fraction of that price. "We're enabling a customer, should they choose to do that, to actually virtualize all the machines in their data center," Lees said.

In other news from IT Forum, Microsoft said it would ship the first service pack for Office 2007 next year. The release is expected to contain mostly patches rather than new features, continuing Microsoft's trend in that direction.

"We're trying to not put features in service packs," Lees said, saying customers prefer that because it means less testing time before they can apply the patches.

Microsoft also announced its latest test build of SQL Server 2008. The database software will be launched at the February event, but won't actually be released until some time afterward.

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