Microsoft Releases Virtualization Tools, Sees Gains Against VMware

System Center Virtual Machine Manager 2008 works with Microsoft's other management tools and costs about one-third what VMware's VirtualCenter does.
Four short months after Microsoft released its new server virtualization technology, the company already is making significant gains against competitors, and it hopes to add to the momentum Tuesday with the release of new virtualization management software to manufacturing.

Microsoft's announcement that it's releasing System Center Virtual Machine Manager 2008 comes on the heels of an analyst report last week by IDC -- underlining how Windows Server's installed base could help Microsoft dominate the server virtualization market -- that found Microsoft grabbed 23% of the server virtualization market last quarter in terms of new deployments. VMware vigorously disputes IDC's findings.

The selling points for Microsoft's server virtualization stack are its low cost and tight integration with the rest of the Microsoft stack, Zane Adam, Microsoft's senior director of virtualization strategy, said in an interview. Virtual Machine Manager, for example, costs about one-third what VMware's VirtualCenter does. Microsoft's Hyper-V hypervisor is an included installation option for Windows Server 2008 and is integrated into Active Directory.

"We've always said virtualization is a feature of the operating system," Adam said.

Virtual Machine Manager 2008 can manage both Microsoft and VMware virtual environments, and also manages the physical machines underlying the virtual ones.

"Everything we've heard in the last few years was that the complexity of managing the physical server and virtual machines separately adds more cost than not, and it requires different training because you have to learn different products," Adam said. "When you manage your environment, you want to manage your environment. It shouldn't be separate."

Among the important features of Virtual Machine Manager is one called Performance and Research Optimization, or PRO. It enables some automated management of both the hardware and software on a machine, provided the servers are "PRO-enabled." For example, if a company is running a virtual machine on a new Dell server and the fan is about to fail, the server can proactively send an alert to Virtual Machine Manager and react by off-loading the virtual machine to another physical server.

In terms of momentum, Microsoft has signed up a bunch of new customers, including Costco, Land O' Lakes and Saxo Bank. The Auxiliary IT Infrastructure department at Indiana University plans to virtualize 90% of its workloads on Hyper-V by the end of the year. Just yesterday, Adam met with a "very large customer" that plans to virtualize tens of thousands of servers.

Adam rebuffed a question on VMware's recent Virtual Datacenter Operating System announcement, essentially a distributed operating system that relies on both on-premises software and cloud computing to spread the main features of an operating system across many servers, and hinted that Microsoft has something similar or related up its sleeve.

"VMware is on the path where they're going to make virtualization into an operating system, but the question is whether the world needs yet another operating system," Adam said. "The idea of a distributed operating system is something that has merit, and you'll hear more about this from [Microsoft CEO] Steve [Ballmer] later this month" at Microsoft's semiannual Professional Developers Conference.

Though released to manufacturing on Tuesday, Virtual Machine Manager 2008 will be available for purchase Nov. 1 for $1,304, including two years of Software Assurance, an option that provides upgrades free. A suite of four System Center products that includes Virtual Machine Manager also goes on sale in November for only slightly more: $1,497, including two years of Software Assurance.

What are other companies are doing to make virtualization work? InformationWeek has published an independent analysis of the topic. Download the report here (registration required).

This article was edited on 10/29 to clarify which department at Indiana University is working with Microsoft.