VMware, MS, others to fight for virtualization edge in Vegas

Competition for a piece of the x86 virtualization market ramps up next week at VMware's annual user conference.

VMworld 2008, VMware's annual user conference in Las Vegas next week, is expected be crowded with a total of 14,000 attendees, including workers from more than 200 trade-show exhibitors that are all fighting for a piece of the x86 virtualization market.

The expected attendance, announced by VMware, is a 30 percent increase from last year's conference. And it probably would have been even higher had it not been for the virtualization market leader's first European conference, which was held in February and drew about 4,500 attendees.

Many new products will be demoed on the trade show floor, including rival offerings -- most notably, Microsoft's Hyper-V virtualization hypervisor, which was released for use with Windows Server 2008 in late June. In advance of VMworld, Microsoft today held a formal launch event for Hyper-V and other new virtualization technologies, at which the company said it would make a stand-alone Hyper-V Server 2008 version available for free to download within 30 days.

VMworld is going to be a big conference in many ways. VMware is facing its first significant competitive threats, especially from Microsoft and Citrix Systems, which acquired XenSource last year and is putting its research and development money behind that company's open-source XenServer technology.

And those companies are far from alone in challenging VMware. There's a raft of smaller vendors trying to gain market share at its expense, as well as relatively new entrants such as Sun Microsystems, which last month began an early access program for its upcoming xVM Server hypervisor.

This also will be VMware's first user conference since the company ousted CEO and co-founder Diane Greene in July, [replacing her with onetime Microsoft executive Paul Maritz -- a move that appeared to be driven by the increasing competition that VMware faces. Meanwhile, both VMware and Citrix announced hiring slowdowns this [northern] summer.

But the battle for attention that will play out at VMworld is taking place on VMware's turf. The company's first conference was held in 2004, just over three years after it introduced its flagship ESX Server software, with about 1,600 people attending. From the start, VMware has let competitors set up booths at its annual show, confident that users would nonetheless continue to choose its products.

Thus far, the company doesn't appear to have been hurt by its conference policy. VMware finished last year with revenue of US$1.33 billion, an increase of nearly 90 percent from 2006. In July, VMware said it expected revenue to grow no more than 45 percent this year, although that's partly because it is growing off a larger revenue base as a result of its past success.

The first users of VMware and other virtualization technologies used the software for server and data center consolidations. That will remain a top issue at this year's conference, but others will emerge as well -- for instance, virtual server sprawl, the creation of virtual machines that aren't tracked all that well within companies.

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