Does Microsoft Get Virtualization?

With VMworld approaching seven thousand attendees virtualization is hitting the world of IT just like that last technology wave, the internet. The technology vanguard has been on board for over 5 years with hardware x86 virtualization, but with VMware’s release of Virtual Infrastructure 3, everyone in IT is taking notice. Virtualization is going to be completely pervasive precisely because it has a fundamental impact on the way IT delivers services and more importantly, the way users will consume services and use applications. It may be grandiose to suggest that we are currently in the middle of a paradigm shift but those who have leveraged virtualization are not going back and the changes in IT processes they see are profound.

Microsoft is not innovating in this area. Its half-hearted attempt at competing with VMware has backfired. By trying to win on price with their Virtual Server product Microsoft tried to reduce virtualization to a simple application. VMware responded brilliantly by beating Microsoft on the only advantage their product had, price, by giving away their Virtual Server product away for free. Essentially, VMware played to the fact that Microsoft does not have a product that competes with their ESX (a bare-metal hyper-visor) and Virtual Center (a enterprise VM management platform) offerings. On a tactical level, playing hardball with VMware backfired and what’s worse, Microsoft has inadvertently given more publicity to virtualization at a time when their virtualization offerings are mediocre.

ESX is more than just an application – it’s a shim between the hardware and OS – that abstracts hardware level idiosyncrasies from operating systems, like Windows 2003. Strategically, VMware is positioned to be an indispensable company for essentially every IT organization as more and more companies adopt virtualization. Virtual Center and its associated APIs provide a new platform that has never existed in IT – a way to abstract, manage and further manipulate the IT landscape at sub-OS level. Together, these two technologies are now just starting to be leveraged beyond vanilla virtual machine deployments.

An ecosystem is being nurtured that includes new concepts such as virtual appliances, dynamic resource provisioning and IT services management. Every Tier 1 vendor and service provided has come on board the virtualization bandwagon. VMware is creating a critical mass of supporting ISVs and partners that will be hard compete with – especially for a company like Microsoft which has had issues generating trust with partners in the past.

What’s more important is that Microsoft can’t genuinely come out with a competing product with ESX precisely because to do so would be to indirectly compete with its own Windows franchise. ESX has taken on much of the role that a traditional operating system provides – interacting with and managing resources for applications. As more and more functionality is leveraged at the ESX and Virtual center level, the actual OS will become less and less relevant.

For example, vendors are able to create custom virtual appliances, that is, software that has the OS and application stack already installed and preconfigured. IT shops won’t have to concentrate on integrating hardware with the OS and then the OS with the application. Instead, the focus will be on the functionality and value proposition of the application instead of the limitations imposed by the customer’s OS and hardware environment. This shift in focus has the potential to be quite devastating to a company like Microsoft which currently has a de-facto stranglehold in the hardware-OS-application nexus.

The death of Windows was last prognosticated with the advent and meteoric rise of Java, which had many of the potential landscape changing characteristics of virtualization. In order for VMware to pull of such a coup would require several more iterations of unchallenged technological progress and community acceptance akin to that which has propelled VMware in the past five years. Yet, if Microsoft does not fight back in a cohesive and substantive manner, like it did against the threat of Java – we may be in a different IT world, so to speak, come the next century.

-Juraj Lisiak