Microsoft Moves to Solidify Virtualization Offerings

Published: January 23, 2008

by Alex Woodie

Microsoft made several moves this week intended to help solidify its place in the market for virtualization software by making virtualization easier to use and more accessible to customers. This includes acquiring desktop virtualization software developer Calista Technologies, expanding its partnership with Citrix Systems and its XenServer business, and loosening the licensing screws previously preventing virtualization from running on certain versions of Windows Vista.

While it might seem like virtualization software has come on like gangbusters in the last few years, there is actually only a small minority of customers using it, according to Bob Muglia, senior VP of the Server and Tools unit at Microsoft. "We estimate that less than five percent of companies are utilizing virtualization technology, because it is simply too cost-prohibitive and complex," he said. On a unit basis, less than 10 percent of servers are virtualized, he says.

Of course, it shouldn't be this way. Virtualization is supposed to save customers money, by allowing them to consolidate workloads onto fewer servers in the data center, and by simplifying the deployment and management of applications to desktops, laptops, and other user-facing devices. Microsoft makes the argument--and some might take exception to this--that existing virtualization offerings are making things worse rather than better. VMware wasn't named explicitly for its role in creating this mess, but it's blatantly obvious that Microsoft is referring to the VMware, which owns the lion's share of the market for X64 server virtualization products.

Microsoft's solution to this problem is to put forth a soup-to-nuts virtualization strategy that addresses all aspects of the virtualized IT infrastructure. It doesn't have such a product suite available yet--Hyper-V, the forthcoming hypervisor layer formerly codenamed "Viridian," is an instrumental component of Microsoft's virtualization strategy that isn't slated to ship until the second half of 2008--but there's no good reason why it shouldn't be talking about its strategy now and getting all the pieces and players lined up, and so that is what it has been doing this week at its Virtualization Deployment Summit in Redmond, Washington.

The acquisition of Calista Technologies is aimed at improving Microsoft's presentation virtualization offerings. Calista develops a product called the Calista Virtual Desktop (CVD) that allows virtualized desktops to display the types of advanced graphics and graphical applications normally only possible in a powerful desktop machine. The CVD approach uses a graphics co-processor on the server to stream rich media and 3D images to virtualized desktops using Microsoft's Remote Desktop Protocol (RDP). Customers can support many more virtualized desktops per server with the CVD solution, the company says, while giving them a superior end-user experience.

Calista is based in San Jose, California, and was privately held. The company will continue to operate as a subsidiary for the time being. Terms of the acquisition were not disclosed.

Calista joins a stack of other virtual offerings from Microsoft, including the SoftGrid Application Virtualization offering (in the process of being renamed Microsoft Application Virtualization), which is based on Microsoft's acquisition of Softricity in 2006. Microsoft also announced that this technology, which is only available to Windows Vista Enterprise users, now supports the streaming of Office 2003 and 2007 applications on the same desktop, which should make life easier for customers.

Another key participant in Microsoft's virtualization strategy is Citrix Systems. While Microsoft and Citrix have worked together for years to enable users to run their Windows applications on servers and stream the interfaces down to desktops or thin clients using RDP or the Citrix version of RDP, called Independent Computing Protocol (ICA), the industry is moving toward more sophisticated forms of desktop virtualization, as embodied by Calista, Softricity, and others.

The more interesting and, arguably, important work that Microsoft and Citrix are doing these days involves XenServer, the open source hypervisor originally developed by XenSource which was acquired by Citrix for $500 million last year. Microsoft and XenSource were already close before Citrix acquired it. Indeed, the two companies inked a deal two years ago to basically co-develop Viridian, the Microsoft hypervisor that now goes by the name Hyper-V. Microsoft and the Xen group don't talk about that agreement much anymore, but it doesn't appear that anything has changed since the two companies committed to co-developing hypervisors and unseating VMWare as the predominant developer of hypervisors.

This week, Microsoft and Citrix unveiled a new alliance that will see them co-marketing a broad array of virtualization products. These offerings will be based on Windows Server 2008 and Windows Optimized Desktop solutions (the SoftGrid and Calista components), and be "extended" with Citrix’s XenDesktop and Presentation Server products, Microsoft says. Then, the whole kit and caboodle will be managed by Microsoft's System Center products.

Microsoft also announced that Citrix is developing a tool that will allow customers to easily transfer virtual machines between Citrix XenServer and Windows Server 2008 Hyper-V. This is not surprising, considering the deal that XenSource and Microsoft made two years ago, in which Microsoft pushed customers to adopt XenServer in the near term in exchange for engineering help in developing Hyper-V. Once Hyper-V was ready for market, it was understood that XenServer would take a back seat in terms of promotion and marketing, and Microsoft would get the glory of competing head-to-head with VMWare.

Microsoft says a test version of this XenServer-to-Hyper-V migration tool will be available in the second quarter, and a final version will be available with the release of Hyper-V, which is scheduled for 180 days following the availability of Windows Server 2008. The new release of Windows Server, of course, is scheduled for next month.

Microsoft also announced that it's developing four Virtualization Solution Accelerators. These guidelines will help customers plan and deploy Windows Server 2008 Hyper-V, Windows Server 2008 Terminal Services, and Microsoft Application Virtualization. You can read the guidelines at technet.microsoft.com/en-us/solutionaccelerators/default.aspx.

Last but not least, Microsoft is loosening the virtualization screws in Windows Vista Home Basic and Home Premium editions. Previously, Microsoft's licensing policy only allowed the Ultimate, Business, and Enterprise versions of Vista to participate in a virtualized setting. That didn't sit too well with customers, and Microsoft has corrected that mistake by allowing consumers to run those operating systems in virtual machine environments.

Muglia outlined Microsoft's vision for virtualization in an executive memo distributed last Friday titled "Harnessing the Power of Virtualization for Dynamic IT." In the memo, which can be downloaded at www.microsoft.com/virtualization/strategy.mspx, Muglia gives a basic description of the primary forms of virtualization, including machine virtualization, application virtualization, presentation virtualization, and storage virtualization, and where we are in the adoption cycle of each. "We believe that in the coming years, server virtualization will become ubiquitous," he writes. "Adoption of other forms of virtualization is just beginning, too, and their potential value remains largely untapped."

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