Red Hat has taken its first step toward offering an alternative, open source virtualization environment for the enterprise.

Red Hat Enterprise Linux 5.4, the latest release which became available Wednesday, includes the KVM hypervisor, extensively tested for enterprise use. KVM stands for Kernel Virtual Machine.

The inclusion of KVM in Red Hat's 5.4 release reflects that firm's expected move away from the Xen open source hypervisor to the product it obtained with its purchase a year ago of the Israeli company, Qumranet.

Unlike other hypervisor suppliers, Qumranet had designed one that could be built into the Linux kernel. It is expected to gain operating efficiencies from inside the kernel, since it uses the kernel's scheduler and memory manager.

"The architectural advantage manifests itself in virtual machine performance and scalability," said Navim Thadani, senior director of virtualization. As it comes out of the gates, Red Hat's KVM supports a virtual machine making use of 16 virtual CPUs. VMware's vSphere 4 has a limit of eight. Like VMware, a KVM virtual machine may have up to 256 gigabytes of memory; the host server on which it sits may have up to a terabyte of memory.

Thadani said KVM in the 5.4 release was capable of hosting large number of virtual machines per physical server, "in the 90s, in some cases," he claimed, although details of what types of compute-intensive applications and amount of I/O required wasn't disclosed. KVM is capable of running applications provided by SAP and Oracle in its virtual machines, he said.

Red Hat's virtualized environment, however, is still at an early stage. It envisions four components; only virtualization as a feature of Enterprise Linux 5.4 is available now.

Red Hat anticipates making the KVM hypervisor available outside the operating system as a stand-alone product, the Red Hat Enterprise Hypervisor. It's also planning to launch the Red Hat Enterprise Virtualization Manager for Servers as a central console for managing KVM virtual machines. The fourth component will be a virtual desktop infrastructure, also based on KVM.

"All four have been in beta since June," said Thadani in an interview. About 100 early adopters have been testing them and providing Red Hat with feedback, he said. They will become available sometime in the second half of 2009.

Red Hat made the announcement of Enterprise Linux with KVM at its JBoss conference in Chicago Wednesday, but it put a representative on the ground and piped video into a hotel next door to VMworld in San Francisco, where about 10,000 conference attendees were absorbing VMware's latest information on its technology.

Red Hat sees itself as a longer term competitor of VMware's ESX hypervisor and its vSphere 4 infrastructure than the longer established, open source Xen hypervisor. Thadani said open source developers have shifted their efforts from Xen to KVM.

"It's becoming increasingly clear that the open source community (interested in virtualization) and the ecosystem around it have started paying attention to KVM," he said. Representatives for Xen.org, the project backed by Citrix Systems, IBM, Oracle, Sun Microsystems, HP and Novell, announced the day before Red Hat's move that it was making a broader set of virtualization components available as open source code.

The project has added features to the Xen hypervisor, originally produced as a computer science project the University of Cambridge in the UK.

The project's originators, including Ian Pratt and Simon Crosby, formed the firm XenSource to provide technical support ; Citrix Systems acquired XenSource in 2007 for $500 million. Crosby said Citrix will donate code toward live migration, virtual switching and other features of the Xen environment to broaden what Xen-based open source code can do.

Xen has gained a foothold among cloud service suppliers because it was the first open source hypervisor on the scene. Amazon's EC2 uses a tweaked version of Xen.

Meanwhile, VMware CEO Paul Maritz announced this week at VMworld that his firm has made vCloud Express available as a virtualization product set for cloud providers to use in supplying low cost services.

InformationWeek has published an in-depth report on server virtualization. Download the report here (registration required).