XenSource new release closes gap with VMware

(Editor's note: The original version of this story contained several errors, including incorrect pricing information. It was corrected at about 6:30 p.m. EDT on Aug. 13.) An upgraded version of the XenSource Inc. virtualization hypervisor released today closes the features gap with market leader VMware Inc.'s offering, but a wide market share gap between the two companies remains, an industry analyst says.

XenSource, whose product is based on the open-source Xen distribution, is introducing XenEnterprise v4, adding features that may make it as appealing as VMware's hypervisor, said John Humphreys, an analyst at IDC. VMware holds 85% of the market for virtualization software, while XenSource and other contenders each hold shares in the low single digits.

A XenEnterprise v4 license lists for $2,499, plus $500 per year for technical support, including free updates to subsequent versions of it, said John Bara, vice president of marketing at Palo Alto, Calif.-based XenSource. The latest version of a comparable VMware offering is Virtual Infrastructure 3, which lists for $5,750 per license, for a two-socket server, plus $1,200 per year for support.

Companies that buy a hypervisor to virtualize their data centers consider performance, workload balancing and availability more important than price, said Humphreys. But if XenSource can prove its hypervisor to be reliable and effective as well as less expensive, it could cut into VMware's market share.

"If you can raise the bar to [match] the market leader in terms of features, functions and capability as well as stability, now you can make price something that customers can weigh," Humphreys said.

Among its features, v4 includes XenResourcePools, which is designed to give users the ability to provision server and storage resources as a group rather than one at a time. "That's a real differentiator for us -- that we can do almost a global provisioning of systems," said Bara.

XenEnterprise v4 can host up to eight virtual CPUs on each guest virtual machine and an unlimited number of VMs per physical server. It also includes a new virtualization system management interface.

In addition, the new release includes a feature called XenMotion, which allows a software application to be moved from one server to another while still running. VMware has had a feature like that, called VMotion, available since 2003.

XenSource scored a coup by partnering with Symantec Corp. -- a move that enabled it to include Symantec's Veritas Storage Foundation storage management software in XenEnterprise v4 for data backup and recovery, said Chris Wolf, an analyst at research firm Burton Group Inc.

"Most of your enterprise backup [independent software vendors] are only officially supporting VMware backup solutions. Symantec will offer official support for XenSource backup and recovery as part of their Net Backup platform. That is still the dominant backup product in the enterprise today, so that's very substantial," Wolf said.

VMware, a subsidiary of EMC Corp., is going public; a 10% stake in VMware will be sold in an initial public offering of stock. The stock could go public as early as Tuesday. Given the market interest in the IPO, EMC last week raised the opening price range of VMware stock to $27-$29 a share, from the $23-$25 range it had projected earlier.

Copyright © 2007 IDG Communications, Inc.

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