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Microsoft, Citrix join forces against VMware

Microsoft Corp. and Citrix Systems Inc. announced today that they have tightened their virtualization partnership to help both companies compete more effectively with market leader VMware Inc.

Citrix said it plans to release a new suite of virtualization management tools in April, called Citrix Essentials, that will be offered in two versions — one for Microsoft's Hyper-V software and another for Citrix XenServer.

Citrix has more advanced management tools than Microsoft for virtual environments, and Microsoft said it hopes the partnership will help spread the use of Hyper-V in data centers. In return, Microsoft has pledged to manage XenServer environments with the next version of its Systems Center management software, which works only with Hyper-V and VMware's ESX. It will also market and sell Citrix Essentials for Microsoft Hyper-V to its customers worldwide, the companies said.

In another move to counter VMware's lead, Citrix will offer its XenServer software free starting in April. One or two high-end features from that product, including the high-availability features, will be moved to Citrix Essentials for XenServer, but many of the capabilities will be available for no charge, said Citrix Chief Technology Officer Simon Crosby.

Citrix Essentials for Hyper-V and Citrix Essentials for XenServer each will be priced at $1,500 to $5,000 per server, depending on the features selected, Crosby said.

The announcements were made just as VMware's customer conference kicked off in Cannes, France.

“What this is really about is Microsoft and Citrix as a team going against VMware,” said Mark Bowker, an analyst at Enterprise Strategy Group Inc.

The tools in Citrix Essentials include StorageLink, for provisioning and managing virtual machines across large storage-area networks; dynamic provisioning, which allows thousands of virtual machines to be booted simultaneously from a single master image; and a new “lab management” tool for creating virtualized test and development environments. It will also have a graphical tool for automating a workflow of complex management tasks.

The version of Essentials for XenServer will include the high-availability features that are in the Platinum edition of XenSource 5. Those features will not be in the version for Hyper-V.

“Citrix Essentials for Hyper-V is a much-needed step, especially for Microsoft,” according to Chris Wolf, a senior analyst at Burton Group Inc.

The storage and provisioning capabilities will be a boost for Microsoft, although the lack of a high-availability option will make some enterprises hesitant about using Hyper-V for production applications, Wolf said. At least initially, he expects the Microsoft system to be more widely used for virtual test and development environments.

The cross-management capabilities between Hyper-V and XenSource will also give Citrix a boost, Wolf said. Customers could deploy XenServer now, he said, with the knowledge that they can adopt Hyper-V later and manage both from Microsoft Systems Center.

However, both vendors still face a formidable challenge in VMware, Bowker and Wolf said. VMware retains a technology lead in server virtualization, and it has an established presence in many data centers.

“A lot of large enterprises have mature VMware deployments; they're a bit cautious about splitting their infrastructure across multiple hypervisors.” Wolf said, adding that today's announcements may have the most effect on small and midsize businesses.

Microsoft and Citrix both said they have a price advantage that makes them competitive with VMware. Customers would have to pay VMware $5,000 per server to get the functionality offered in the free XenServer, according to Crosby. However, VMware's Infrastructure 3 software does include features that XenServer will not have.

Microsoft wants to make virtualization part of the Windows operating system, just as networking capabilities are a part of Windows today, said David Greschler, Microsoft's director of Systems Center marketing. The fact that companies are familiar with Windows lowers their training costs, he argued. “When they know Windows, they know virtualization.”

Both companies see plenty of room for growth in the market.

“Today we're seeing [virtualization] at about 20% to 30% penetration,” Greschler said, “but we expect that to grow very fast, and it will be in the upper 80% to 90% range very quickly.”

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