If there was any remaining doubt about the software virtualization market going mainstream, allow it to be quelled now. In the wake of ever-aggressive pricing changes to Microsoft's Virtual Server product line, virtualization giant VMWare announced that it was rebranding its VMWare GSX Server product as VMWare Server and offering it to customers for free. Consider the gauntlet thrown down.

The potential market for this software is humongous. With more companies looking to consolidate aging Windows NT-based servers, virtualization has emerged as a major market opportunity. And of course, the traditional virtualization markets--testing, help desk, and so on--remain important as well.

VMWare's free offering follows a spate of announcements from Microsoft that resulted in incredibly low prices for Virtual Server. The original Windows Server 2005 version, fore example, cost $499 for the Standard Edition and $999 for the Enterprise Edition. With Virtual Server 2005 R2, however, Microsoft has slashed prices, Crazy Eddie style: The Standard Edition is just $99 now, while Enterprise Edition costs just $199. And for limited time, customers that purchase Windows Server 2003 R2 Enterprise Edition can get Virtual Server 2005 R2 Enterprise Edition for just $99. That offer is good through the end of June, 2006.

In the server market, such prices are unheard of. Indeed, Microsoft's client-side virtualization offering, Virtual PC 2004, is actually more expensive: The full retail price of that package is $129, and Virtual PC is much more limited than Microsoft's server offerings.

This, then, is the market VMWare found itself competing in. And it's solution, VMWare Server, is somewhat inspired. Like its previous GSX Server offering, VMWare Server utilizes the same high-performance virtual machine format as its ESX Server and VMWare Workstation products. The VMWare solutions also offer a number of features that aren't available in Microsoft's products, such as Linux host system compatibility (Virtual Server runs only on Windows Server, of course) and USB support from within guest environments. Also, because VMWare has been supporting Linux guest environments all along, its Linux support is superior (Microsoft only recently reinstated Linux guest support in Virtual Server 2005 R2).

In my opinion, one of the biggest improvements to VMWare Server is that it finally supports 64-bit x64 guest OS installations, while Virtual Server does not. I think it's pretty obvious by now that native x64 environments like Windows XP x64 Edition and the Windows Server 2003 x64 are off to a slow start, and virtual machine support should help get developers going testing their solutions on x64 systems.

As a free and entry level product, VMWare Server won't meet everyone's needs, but it's certainly a compelling product for the developers, branch offices, and small businesses that VMWare is targeting. Compared to its ESX Server-based brethren, VMWare Server is limited in a few ways and is ideal for testing and legacy (read: NT 4-based) server consolidation scenarios. For example, VMWare Server cannot cluster virtual machines across different hosts or provide native SAN access to guest machines. It does support 2 to 16 CPUs per server, up to 64 GB of RAM in the host system, like ESX Server, but can typically only host 2 to 4 simultaneous virtual machines per processor core, about half the capacity of ESX Server.

The battle for the virtualization market is just like any other competition in the PC market: Both Microsoft and VMWare would like to see their virtual machine formats become the de facto standard, and each of the company's moves should be seen in that light. Microsoft has established itself as the low-end, safer vendor, if you will, and it is clearly targeting specific markets with its Virtual Server products. Meanwhile, VMWare appears to have the better performing and more versatile solutions, and you can't argue with the pricing of either solution.

One other differentiator is that VMWare and its partners are starting to offer pre-built virtual environments for sale and free download, which offer ready-made, plug-and-play OS and application installs. This could be an interesting application deployment scenario for the future, and I do recall Microsoft admitting to me previously that they were examining the possibility of using their VHD virtual machine format as a standardized software deployment format going forward. This is quite a big step up from the first few virtualization solutions, which were basically designed as a way to run Windows application on top of Linux.

In any event, VMWare Server is free, and you can download a beta version of the product from VMWare's Web site. My advice is to give it a shot. At this price--or more appropriately, this lack of price--VMWare Server is certainly worth examining.

This article originally appeared in the January 7, 2006 issue of Windows IT Pro UPDATE.