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Microsoft plans ESX killer with standalone hypervisor

Windows Server 2008 prices set as Microsoft discloses plans for Hyper-V.

Although Windows Server 2008 is inching closer to completion, Microsoft is still tweaking its OS strategy, particularly where plans for its virtualization technology are concerned.

At IT Forum 2007 in Barcelona this week, Microsoft disclosed pricing plans for Windows Server 2008, which the company said is on track to ship in the first quarter. Microsoft also said it has renamed as Hyper-V its hypervisor -- once code-named Viridian and referred to as Windows Server virtualization.

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Hyper-V is a feature in Windows Server 2008, but now it will also be a standalone server, said Julius Sinkevicius, a group product manager at Microsoft. The standalone Hyper-V server consists of a hypervisor and some core technologies that are required to support the hypervisor. "Hyper-V uses a hypervisor that installs itself between the hardware and the parent partition," Sinkevicius said.

There are no additional usage rights to launch instances of Windows, such as those that customers receive through the purchase of Windows Server 2008.

One analyst familiar with Microsoft's plans said that the standalone version of Hyper-V will compete directly with VMware Inc.'s ESX Server, which runs on a server's bare metal. "This lets Microsoft have a direct competitor [to VMware] without being tied to the OS," said Chris Voce, an analyst at Forrester Research Inc., a Cambridge, Mass.-based consulting firm.

Hyper-V gains virtualization flexibility for Microsoft

"Because Hyper-V is tied to the OS, it could be seen as a barrier to implementation," Voce said. "With server OS deployments, they don't get rolled out as soon as they are released. This gives Microsoft a little flexibility to get into the market a little earlier," he said.

The decision to offer a separate virtualization server is a departure for Microsoft, which has said repeatedly that virtualization capability should be a part of the operating system.

"We believe this feature is part of the OS, and we think most customers will buy [Windows] Server 2008, but we are making the feature available as a standalone product too," Sinkevicius said.

Microsoft will still deliver Hyper-V capabilities for Windows Server 2008 sometime in mid-2008. The company has said that virtualization features for the server will ship about 180 days after the server itself is available. The standalone version of Hyper-V won't be released until sometime in the second half of 2008 and will cost $28 per physical host, he said.

Sinkevicius said the standalone Hyper-V should mainly appeal to IT managers who are consolidating old servers. The target customer for the Hyper-V standalone server is someone who has Windows Server 2003 or Windows 2000 Server and wants to consolidate yet also wants to take advantage of 64-bit hardware with built-in virtualization.

"You can use the standalone server to take advantage of the hardware and consolidate existing licenses," he said. "For those buying new licenses, we will recommend Windows Server 2008."

Customers will be able to buy Windows Server 2008 with or without Hyper-V. Anyone with Windows Server 2003 and a Software Assurance (SA) licensing agreement will automatically get Windows Server 2008 with Hyper-V. Customers without SA who are buying new licenses can choose either version. The list price without Hyper-V will run about $28 less than the full version of Windows Server 2008.

Microsoft said it will increase the prices of its volume server license by 1%. The estimated retail price for Windows Server 2008 Standard version is $999. The price for Windows Server 2008 Enterprise version is $3,999 with 25 client-access licenses. Licensed per processor, Windows Server 2008 DataCenter costs $2,999 per processor, which gives the customer unlimited virtualization rights.

Windows Server 2008 is currently a release candidate. Microsoft said it has yet to decide whether or not it will offer a second release candidate before its server is released to manufacturing.

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