From http://www.investors.com/editorial/IBDArticles.asp?artsec=17&issue=20080310
BY DONNA HOWELL: INVESTOR'S BUSINESS DAILY

The computing trend known as virtualization would be even hotter if software makers provided more support and licensing for software that runs on virtual machines, industry observers say.

Server virtualization involves complex software that "partitions" one physical server into multiple "virtual" machines. This lets the server run software for many types of operating systems and make better use of its computing power.

Some vital business applications, however, are supported or licensed only for physical servers. In these still-early days of the trend, going virtual can sometimes mean going without tech support and running afoul of licensing terms.

But more software makers are starting to support virtualization.

Customers often choose a virtualization vendor partly by the support available for applications that run on its virtual machines. The question figures strongly as competition rises between virtualization leader VMware (VMW) and its rivals."It's a significant consideration," Burton Group analyst Chris Wolf said. "VMware offers the most mature solution. And it's the easiest path to go down today in terms of the vendor support landscape."

Wolf expects the support landscape to change later this year as Citrix Systems' (CTXS) XenServer matures and Microsoft (MSFT) releases its Hyper-V virtualization. These are among VMware's major rivals.

Trying To Go Mainstream

The more support a virtualization provider can attract, the more it legitimizes it, according to Wolf.

"It shows they're a mainstream platform," he said.

In a recent report, he said some software vendors offer no official support for the typical virtualization customer. Others offer limited support, usually just for VMware.

That's something VMware foes are keen to change. Citrix, in the business of connecting remote users to applications, bought virtualization vendor XenSource in October. It aims to leverage its ties with software makers.

"At Citrix, our entire history is around applications," said Wes Wasson, a senior vice president at the firm. "We have deep relationships with SAP (SAP) and Oracle, (ORCL) and with Microsoft we're really engaged on the application side."

Making sure applications and virtualization run well together can take deep testing, modeling and more, Wasson says. In some cases, it might be best to tailor a custom version of an application for virtualization, or vice versa.

"Don't be surprised to see a XenServer 4 for PeopleSoft or for SAP, or things like that," Wasson said.

Certifying and validating that products work together can take months, while deep customization can take a year or two, he says. But the bottom line, analysts say, is that software makers must find a way to work with virtualization or risk losing sales to rivals that do.

"A lot of applications themselves are difficult to virtualize, such as e-mail databases," Wolf said.

VMware rivals — which also include Novell, (NOVL) with its pending purchase of PlateSpin — are all trying to beef up to compete with VMware, says Drue Reeves, an analyst at research firm Burton Group.

"People have begun to trust VMware. That's the problem Microsoft and others have, short-term," Reeves said. "But in the long term, you have to worry about their competition taking market share away."

Microsoft has captured market share in the past by integrating applications with its operating systems and other products, Reeves points out. He cites what happened with Novell's NetWare network operating system.

"The way (Microsoft) took over market share from Novell is they tied Exchange, SQL Server, (Web server) IIS and Active Directory to their operating system," he said. "How long will it be before Microsoft begins to tie those applications to Hyper-V?"

Seeking Alliances

Virtualization vendors, though, are trying mutual cooperation with rivals, hoping that it helps them all. Many alliances are under way. Microsoft and Citrix, for instance, plan a second-quarter test of a way users could move a virtual machine one platform to the other.

As virtualization grows, Reeves says, software vendors are feeling pressure to make their licensing plans virtualization-friendly.

"There are several large enterprises where their default for deploying new applications is inside a virtual machine. Virtualization support is an issue for many of them," Wolf said. Some go so far as to require it in the bid requests they submit to software makers.

Wolf noted in a recent report that now most applications can run efficiently inside virtual machines, and application vendors have a responsibility to develop licensing and support policies that offer virtualization compatibility without added expense. He also said that vendors are much more compelled to update their licensing policies when pressured to do so customers.

Virtualization started in the 1960s, when IBM (IBM) introduced it for mainframes. Server virtualization is getting a foothold and virtualization has started to move to PCs.

"Although virtualization has been around for more than four decades, the software industry is just beginning to understand the full implications," Microsoft Senior Vice President Bob Muglia said in a January memo. He said server virtualization is "still very early in the adoption cycle."

Copyright 2000-2008 Investor's Business Daily, Inc. Click here for copyright permissions!
Copyright 2000-2008 Investor's Business Daily, Inc.