With Hyper-V R2, Microsoft sets its sights on VMware

Competition between VMware and Microsoft got a little tighter on Thursday with the release of Windows Server 2008 R2, which includes a major update to Microsoft's Hyper-V virtualization software.

VMware dominates the server virtualization market, but Microsoft hopes to change that with its new offering, Hyper-V R2. The update adds important capabilities that help Microsoft close the functionality gap with VMware and other rivals. But analysts still see the product falling short in a few areas required for running enterprise-class applications.

"They've got a lot of the basics covered if you are doing basic consolidation, but they are lacking a lot of the advanced use-case stuff like business continuity, resource optimization and VDI (virtualization desktop infrastructure)," said Gary Chen, research manager for enterprise virtualization software at IDC.

The next version of the product will likely address many of these issues, he said. In the meantime, Microsoft will try to exploit the advantages it has historically used to push its data center server products, including lower prices and a close tie-in with other Microsoft software. "They are definitely more competitive on pricing," Chen said.

Hyper-V R2 ships free with Windows Server 2008 R2, although to take full advantage of some of its more advanced capabilities customers will have to purchase System Center Virtual Machine Manager, which costs US$869 per physical server.

The new features include Live Migration, which allows virtual machines to be moved from one physical server to another without interrupting service. Hyper-V R2 can also take advantage of more powerful servers, with support for up to 64 physical processors, and allows virtual machines to be migrated between two servers based on the same processor family, such as AMD's Opteron chips.

In the end, the choice of which product to use may come down to whose vision customers most believe in for how the future of virtualization will play out.

Microsoft is counting on its belief that virtual servers ultimately won't account for more than 50 percent of a company's server infrastructure, with physical servers representing the rest. In this scenario, Hyper-V's ability to manage both physical and virtual servers may give it an edge over VMware, whose tools manage only virtual infrastructure.

Microsoft's idea of how virtualization gets deployed is fundamentally different from that of VMware, which sees customers running nearly all their servers, along with much of their storage and networking equipment, in a virtualized environment.

"While the competition may have had a head start on the hypervisor for the server, we always take the long-lead view and say, 'Where is this going to go?' " said Bob Kelly, corporate vice president of infrastructure server marketing at Microsoft.

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