Microsoft's current position
Microsoft's investment in the virtualization space actually began in 2003 with the acquisition of Connectix which at the time was VMware's sole competitor. Since then, Microsoft hasn't done much save for making one minor update per year to Virtual PC (the existing Connectix product at that time) and Virtual Server (in development at that time). Through its relative inactivity, Microsoft essentially conceded the leadership position in virtualization to VMware.
In October 2005, Microsoft changed its approach by announcing a long-term strategy to conquer the virtualization market. As details of the strategy continue to emerge, the abiding question has yet to be answered: Does Microsoft have a legitimate shot to beat VMware at its own game?
A new virtualization strategy: Viridian
A major part of Microsoft's renewed virtualization strategy is code-named Viridian, a new hypervisor that is deeply connected with the Windows kernel. Viridian is expected to be available for free and delivered as a service pack, with tighter integration within the operating system to follow within a few years.
Viridian is designed to compete with ESX Server, VMware's data center product.
In order to offer a viable alternative to ESX Server, Microsoft is investing a lot in areas of performance and capabilities. To improve virtual machine efficiency, Microsoft is working with Intel and AMD to get the most from their next generation of processors. Microsoft has also struck a partnership with XenSource, makers of open source hypervisor Xen, to make sure Linux guest operating systems will achieve the highest performance possible.
On the capabilities side, Microsoft is taking care to grant compatibility with current Virtual Server virtual machines images (.vhd). And the company is directly modifying Windows so that the operating system can sustain a hardware modification—such as adding memory modules, processors or network interface cards—while running in a virtual machine.
Microsoft can't seriously compete with VMware and its powerful VMware Infrastructure product with Viridian alone. Also included in Microsoft's plan is an enterprise management tool, the System Center Virtual Machine Manager (SCVMM), which has two delicate tasks to achieve: To simplify migration to Viridian for current virtualization customers and to provide an effective solution for large scale virtual data centers.
Microsoft can solve the first task by directly managing side by side Viridian and Virtual Server hosts, and by permitting virtual to virtual (V2V) migrations from those hosts and from other virtualization platforms to Viridian.
Microsoft can solve the second task by introducing semi-automatic provisioning tools as well as per-groups resources reservation capabilities.
A large part of Microsoft's enterprise virtualization strategy depends on Virtual Machine Manager, which has been in beta test since August 2006 and should launch before Viridian.
Ultimately, Microsoft has to rely on its partners to succeed. To that end, , Microsoft launched the VHD Test Drive Program in November, 2006, which allows potential customers to download pre-built virtual machines loaded with Windows preinstalled, SQL Server and Exchange Server among other popular Microsoft products.
This move, which at first seems like a poor attempt to copy the recently announced VMware Virtual Appliance Marketplace (VAM), actually has a different purpose. When Microsoft extends the program to ISVs, customers will be introduced to the Microsoft virtualization platform en masse. Microsoft will then be in a position to let customers know there is a new player in the virtualization market.
The second step: Application virtualization
Microsoft's strategy is not limited to providing a new server virtualization platform. The company is also betting on application virtualization, a technology that serves self-contained applications on demand without the need for installation. The idea promises to radically transform the client side of IT infrastructures and succeed where thin computing has thus far failed.
In July 2006, Microsoft acquired Softricity, one of the most prominent vendors in the application virtualization space. Currently, the company is offering the original product called SoftGrid, without much modification or any serious marketing effort. But it's expected that Microsoft will integrate SoftGrid with its System Center Configuration Manager (formerly System Management Server or SMS) first and then follow up with Windows integration. Ultimately, Microsoft has a chance to complement the Viridian virtualization offering with SoftGrid technology and reach customers where VMware can't yet do so.
The most mysterious part of Microsoft's strategy involves the adoption of another virtualization approach called OS partitioning or OS virtualization.
In today's market, this approach is considered a less flexible alternative to server virtualization (or hardware virtualization) due to an inability to host different operating systems on the same hardware. This holds true, even if OS partitioning can better apply to some scenarios where multiple identical environments must be managed in a similar way, such as with web hosting.
At first glance, it's not clear why Microsoft would pursue OS virtualization, especially since the company is investing so much in hardware virtualization. But when I carefully look at the possibilities, it's apparent that Microsoft will be able to offer abstraction at three levels: hardware, operating system and application. What this means is that customers will be able to decide how much granularity they need in tomorrow's highly powerful data centers. In essence, Microsoft is heading down a road that leads to unmatched flexibility and endless configurations.
Despite all these technologies, it's easy to be skeptical about Microsoft's chances to become a virtualization leader.
In my opinion, Microsoft's chance to win lies in the SMB space where VMware is weaker at the moment. Even with a development war chest and an impressive marketing machine, Microsoft may not have enough sway to move the largest customers away from ESX Server in the short run. VMware's enterprise features which are designed around the needs of Fortune 500 companies can't be matched by Microsoft right now.
But Microsoft can tap a huge potential base of customers: Those that are using VMware products because they are free, those that don't need or can't afford SANs, and those that don't have the resources for networking, system, or storage administrators. There is an even greater pool of potential customers who are not adopting virtualization yet because they are unaware of it, are unsure about its reliability or are simply waiting to see what Microsoft will do.
All of these potential customers represent SMBs around the world, and it's a market segment where Microsoft has an opportunity to surpass VMware.
By placing Viridian in every single new copy of Windows Server, Microsoft will make it easy for SMB customers to implement virtualization technology. The hypervisor will be part of the OS as a checked option in the installation process just like an integrated component to administer with Management Console such as IIS or Active Directory. The hypervisor will also serve as a standard host to backup along with usual products, and it will be a new chapter in the administration guide or the official classroom courseware. There will be nothing to search, download or install, and there will be little learning curve.
Such ease of implementation is a huge advantage in a world where there is no budget for training or no time for testing compatibility. The integration Microsoft can provide among its products can drive adoption in the SMB market more readily than any technical enhancements.
To facilitate the integration, Microsoft may use a Windows Small Business Server (SBS), a product that has had decidedly mixed fortunes so far.
The most persistent criticism to SBS surrounds security: It's impossible to provide an acceptable level of trust on a host where directory services, DNS services, mail services, database services, Internet and intranet web sites are installed together. (The inclusion of ISA Server and WSUS doesn't help much since they cannot address isolation of publicly accessed servers).
Now imagine if Microsoft releases the next version of SBS based on Viridian, where every product is securely contained within a virtual machine, virtual networking is pre-configured to run publicly accessed servers in a screened subnet, and every Windows instance points to the ISA Server virtual machine as its enterprise firewall.
Sounds like a server farm in a box.
Who wouldn't want a pre-configured server farm in a box at a bundle price? In such a scenario, it would be easy for Microsoft to conquer the SMB market and hard for VMware to sustain the position that its virtualization platform is better.
About the author: Alessandro Perilli, a self-described server virtualization evangelist, launched his influential virtualization.info blog in 2003. He is an IT security and virtualization analyst, book author, conference speaker and corporate trainer. He is a Microsoft Most Valuable Professional for security technologies and the certifications he holds include Certified Information Systems Security Professional; Microsoft Certified Trainer; Microsoft Certified System Engineer with Security competency; CompTIA Linux+; Check Point Certified Security Instructor; Check Point Certified System Expert+; Cisco Certified Network Associate; Citrix Metaframe XP Certified Administrator.