As Microsoft readies Hyper-V, the new hypervisor software that forms the foundation for virtualization in Windows Server 2008, VMware is finally facing some real competition in the Windows server virtualization market. Unfortunately, Microsoft has followed in VMware's footsteps by creating its own, proprietary way of doing things, and VMware doesn't want to play along. The result: IT faces a choice between two virtualization options that are incompatible.

Virtualization services are built on top of a thin layer of code, called a hypervisor, that sits on top of the hardware and abstracts it away from the virtual Windows servers running above. The primary purpose of this program is the redirection of requests between multiple virtual machines and the underlying hardware so that each VM thinks that it is in charge. It is, in essence, basic plumbing.

The idea that the hypervisor would evolve to become a commoditized, standardized substrate, and that innovation would occur in the software layers above that, ain't happening. Instead, this contest is shaping up to be more about a clash of the titans, where two companies with near monopolies in their respective markets pit one proprietary design against another. You want in? Write to our APIs.

Microsoft, which owns the operating system, has already released a beta of Hyper-V and the final release is expected in the next few months. VMware, which dominates the Windows server virtualization market with its ESX offering, continues to hone its own tools within the VirtualCenter suite. Over the next year, users will have a choice between two virtualization management stacks that can't interoperate because each has innovated at the plumbing level.

And that's just fine by VMware. "We have never believed that the hypervisor would be commoditized. To imply that it's a commodity would imply that there's no differentiation," says Ben Matheson, director of marketing at VMware.

What VMware and Microsoft are battling over is a tiny bit of code (Hyper-V is just 800KB in size) that is sandwiched inside the industry-standard WinTel platform, between the x86-standard iron and the de facto standard Windows operating system.