For most people, an appliance marketplace might suggest somewhere to buy a new refrigerator. But not in the virtual world.

VMware, the leader in the market for virtualization software, said last week at its user group meeting in Los Angeles that it's launching Virtual Appliance Marketplace, a Web store that offers ready-to-run software applications with their own built-in operating systems. Known as virtual appliances, these next-generation apps are formatted as a single file that runs in a virtual machine.

Virtualization software turns a hardware server into several virtual machines. With its VMware Server and ESX hypervisor virtualization software, VMware is both the virtualization market leader and the leading vendor of software for virtual appliances. That's why software companies are gravitating to VMware as the foundation for these next-gen apps. Over the last six months, the list of appliances available from VMware's Web site has grown from near zero to 330. VMware's new Virtual Appliance Marketplace formalizes those relationships; VMware will offer certification that the appliances follow best practices for security and reliability and will boot with their initial installation on a VMware virtual machine.

VMware sees virtual appliances as its next big market opportunity. "Server consolidation has driven virtualization so far," said Diane Greene, president of VMware, in her opening day keynote. But virtual appliances "represent a transformation in how we build and deliver software."

Most virtual appliances are based on the Linux open source operating system. But Microsoft has noted the trend toward appliances and is taking its own baby steps in that direction. The day before VMworld, Microsoft announced that it would start distributing Windows 2003 and its SQL Server 2005 database in a virtual hard-disk format ready to run in Microsoft's Virtual Server. It's meant to give customers a faster means to test and evaluate Microsoft products--but only for 30 days. Twenty of Microsoft's technology partners will offer their applications in the same bundled way, for the same 30-day trial. That approach should really take off when Microsoft offers a test version of Windows Vista, its upcoming operating system, in the virtual hard-disk format for Virtual Server.

VIRTUALLY SIMPLER

Virtual appliances promise corporate IT shops cost-savings and other efficiencies. Testing and evaluating a virtual appliance involves moving a computer file to a server with an available virtual machine, a task that might take a few minutes. In contrast, enterprise software evaluators have needed to order a separate server for the task and then get the software to be tested installed on it, a process that takes several hours or days.

Mendel Rosenblum, co-founder of VMware and associate professor of computer science at Stanford University, says most operating systems are designed to run as many apps as possible. But the more general their capabilities, the more open they are to intrusion and compromise. Virtual appliances, on the other hand, are based on versions of an operating system optimized to run one application, with no extra parts. "It's a much smaller, application-specific operating system," he says.

"We believe this is how most software will be deployed," says VMware VP Raghu Raghuram.

Customers of CohesiveFT, which builds applications for financial services firms, have been asking the company to build virtual appliances using standard financial services protocols and middleware specific to their needs. That way financial institutions "get behaviors designed for their purpose," CTO Pat Kerpan says. "They get isolation and security." They also get more convenient, easier-to-use software. Says Kerpan: "Downloading applications becomes as easy as downloading iTunes."