Microsoft Buys Its Way Into Server Consolidation Space

Delay in virtualization product's release may be saving grace for rival offerings from VMware

Microsoft Corp. is counting on the virtual machine software that it acquired last week from Connectix Corp. to appeal to Windows NT Server 4.0 users who are interested in server consolidation and migration.

The Connectix Virtual Server software lets users run multiple distinct copies of server operating systems—including Windows, Linux and Unix—on a single physical machine.

But it's unclear how receptive users will be to the new Microsoft offering, since it won't become generally available until year's end and its arch competition, GSX Server from VMware Inc. in Palo Alto, Calif., has been shipping for more than two years.

San Mateo, Calif.-based Connectix recently said its Virtual Server product would ship this quarter. But Jim Hebert, general manager of Microsoft's Windows server product management group, said security and code reviews, tuning and localization work will cause Microsoft to delay the product until the fourth quarter.

"Do I wait? They've never hit a deadline yet," said Tom Pane, a vice president of technology at New York-based AnnTaylor Stores Corp., which has been exploring server consolidation with VMware.

Cognizant that support is winding down for Windows NT Server 4.0, Pane said that the retailer has already begun its conversion to Windows 2000 and that he doesn't want to wait until next January to get off of NT.

"If they came out tomorrow with it, I'd buy it and evaluate it right away, because it solves my problem of trying to at least consolidate testing environments," Pane said.

Diane Greene, CEO of VMware, acknowledged that Microsoft had approached her company and that there were some discussions, but they didn't come to an agreement. She said VMware already has thousands of customers, adding that Microsoft's acquisition of Connectix "just amplifies our focus on delivering and continuing with our innovation and quality and providing full choice for our customers."

"It's a pretty large market," Greene said.

Tony Adams, a technology analyst at J.R. Simplot Co. in Boise, Idaho, said his company pared 30 physical servers to five boxes running VMware's GSX software during the past eight months. That move helped the company reduce the time needed to purchase, configure and deploy a server from two weeks to a couple of hours, according to Adams.

The company was so happy with the consolidation project that it's now planning to deploy 15 to 20 physical servers running VMware software for new applications.

Adams has seen Connectix, but he said Microsoft "would really have to do a much better job to win us over," since VMware has been a great fit. Plus, Adams said, he runs VMware's GSX software on Linux—something he wouldn't be able to do with the new Microsoft product.

Alejandro Bombaci, CIO at Empresas Polar, a consumer goods manufacturer and distributor in Caracas, Venezuela, said he would prefer to see hardware makers or third parties provide the virtual machine functionality, "so there will be more independence on the support for each operating system under the partitioning software."

Despite those sentiments, some analysts said they anticipate that many users will be more comfortable going with Microsoft's virtual machine software.

"You really want one vendor to deal with when you're dealing with operating systems," said Rob Enderle, an analyst at Cambridge, Mass.-based Giga Information Group Inc. Plus, Enderle said, he expects Microsoft to eventually build the virtual machine software into its operating system "to the point where they're almost giving the stuff away."

Hebert said that over time, the product might be included with the operating system. Virtualization software has become an increasingly popular consideration for Microsoft users coping with the problem of Windows server sprawl, since the software can help them reduce hardware expenses and operating costs.

"We were hearing from customers that getting a supportable virtual machine solution from Microsoft would be an attractive thing," Hebert said.

NT Server users often run a single application on each of their Windows servers, either because software vendors require it or because they worry that problems with or changes to an application will cause others to crash.

Hebert noted that as a result, much of the hardware running Windows NT Server 4.0 has gone underutilized. Yet because the hardware is nearing the end of depreciation schedules, some customers want to replace it, he said.

Rather than moving Windows NT applications onto new hardware that will be even more severely underutilized, the user can move it to new, faster hardware running the Virtual Server product, Hebert said. That would let several Windows NT servers be consolidated on a single box.

And there's an added benefit for Microsoft. Hebert noted that the Virtual Server software requires its own underlying operating system, and Microsoft hopes customers will choose to run the Virtual Server software on Windows Server 2003, due in April.

But not every company will be rushing to do Windows server consolidation. Jim Prevo, CIO at Green Mountain Coffee Roasters Inc. in Waterbury, Vt., said companies pay a premium for the larger servers. Plus, he said he would rather have less functionality off-line if a server crashes or needs to be taken down for an application upgrade.

Rick Stiegler, chief technology officer at Lending Tree Inc. in Charlotte, N.C., said his company's applications perform better on two-way servers than larger four-CPU boxes, so consolidation isn't in his company's plans.

Shopping List

Microsoft last week acquired three software products from Connectix, in addition to its engineering and support teams.

Virtual Server: Native Windows-based server application that enables users to run a broad range of operating systems in virtual machines - including Windows, Linux, Unix and OS/2 - concurrently on a single physical Intel server. Product is currently in beta-testing phase.

Virtual PC for Windows: Client software that allows users to run multiple PC-based operating systems - including Linux, NetWare, OS/2, Solaris and Windows - and applications simultaneously on a single workstation.

Virtual PC for Mac: Client software that lets Macintoshes run Windows applications, access PC networks and share files with PC-based users. Product provides functionality and compatibility of a Pentium PC through software emulation of the standard Intel chip set and other hardware components.

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Copyright © 2003 IDG Communications, Inc.

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