It's no secret enterprises are making heavy use of virtualization in the data center. Market research shows their leading provider is VMware. With Microsoft offering virtualization in Windows Server 2008 and other free alternatives available, it's hard to see how VMware's grip will last. But VMworld offered a glimpse of why it may.If virtualization were just about x86 server consolidation, then all bets would be off. Microsoft, with its combination of Hyper-V and Virtual Machine Manager in the System Center suite, would be in a position to takeover management of both physical and virtual resources.

And Citrix Systems, making its virtual environment freely available as open source code, might move in as well.

But, if anything, I am struck after VMworld in San Francisco Aug. 31-Sept. 3 by how far virtualization is moving beyond the simple task of consolidation.

"Long distance VMotion… Now that's what gets me excited," said a systems engineer for virtualization over breakfast Thursday. He works for a major aerospace firm and said I couldn't use his name, his company's legal department would have a fit. But he'd like to be able to move virtual machines between data centers that are 1,300 miles apart.

Stephen Herrod, VMware CTO, defined long distance VMotion during the San Francisco show as being able to move a running virtual machine off one physical server and drop it onto another 124 miles away. The state of the network around the virtual server as well as the state of the virtual server itself had to transfer with it, and only by working with networking partners was VMware able to demonstrate the feasibility of VMotion, long distance. Yet it appears to be a function that's just around the corner. Think of it. You're in Southern California and an out-of-control wildfire is about to reach the back door of your data center. Wouldn't it be nice to VMotion the whole thing temporarily out of harm's way? Backup and recovery, disaster recovery, or better yet, disaster prevention, as in the example above, are all functions made easier by virtualization. High availability within the data center is simpler and easier.

Beyond that, it's becoming feasible to package up a virtual machine with its security measures, including the policies that govern its environment and an accompanying firewall as a virtual appliance, and move them around at will.

All of this would be important if were taking place strictly within the boundaries of the data center, but it's the prospect of an external dimension, moving part of the data center's workload into the cloud, that puts virtualization in a new light.

If it's about to become paramount to move units of computing around as logical resources, which is the better platform: an environment where virtualization is a feature of the operating system, or an environment where virtualization is its own end, a platform that can assume cross-operating system responsibilities?

VMware might never have gotten a chance to answer this question with its broadened product set -- vSphere 4, virtualization as a layer that exists in its own right with its own management properties -- if it hadn't been for the economic downturn. The downturn spurred consolidation and raised the question of what's next. If there are economies of consolidation to virtual machines inside the data center, can there be economies of scale and operation outside it?

It's still early to say, but the answer appears to be yes, cloud computing promises such savings. And VMware is in position to bid for leadership in the cloud.

"The best thing that's happened to cloud computing has been the downturn in the economy," said Manuel Medina, chairman and CEO of Terremark, a cloud services provider and VMware partner, during VMworld.

The best thing that's happened to VMware in its race with competitors is also the downturn. The recession has hurt many. But it's also spurred long term thinking toward greater efficiencies. Virtualization has already removed capital costs; could it someday allow the data center as a whole to shrink, reducing the number of machines and staff? Can we offload part of the workload to professionally managed, external data centers but still manage our portion through a logical interface?

VMware is saying yes, and after VMworld, it looks like its grip on enterprise virtualization is strong enough that large enterprises will give it another year to show what it can implement.