Wednesday, October 18, 2006

Microsoft Responds to Virtualization Threat

At risk of falling farther behind in the increasingly important virtualization race, Microsoft indicated yesterday that it would open up its Virtual Hard Disk format under the terms of its Open Specification Promise. VMware opened its VMDK specification almost a year ago, and they continue to barrel forward, delivering $188M in revenue in the current quarter - up 86% from last year. I suppose Microsoft has determined that they cannot set the agenda with a proprietary format when they are so far behind such a significant competitor.

Why should anyone in the open source space care about this announcement? It is important because it will enable software vendors to build Linux applications that run on Microsoft systems. When all Microsoft servers provide virtualization services via VHD, a Linux software appliance can install on the system by copying a VHD file onto the system and starting the VHD service. The software appliance simply needs to be "wrapped" in a VHD container, thereby creating a virtual appliance. Any utilities, such as failover, SAN connectivity, etc, that Microsoft provides via the VHD service will now be available to Linux based software appliances. The OS that runs the hardware is now de-coupled from the OS that runs the application.

Why should software vendors care about this announcement? Currently, software vendors spend far too much engineering expense, up to 50% of the R&D budget in some cases, on multi-platform porting, maintenance, QA, installers, customer service, etc. With virtualization services as the interface between the application and the "hardware" operating system, ISVs can simply do a single Linux port to create a Linux based software appliance that will plug-in and run in any customer environment. Because the "application OS" is de-coupled from the "hardware OS," the ISV is in total control of their environment without sacrificing any market share associated with customer platform preferences.

Why should customers care about this announcement? Customers will be able to dramatically reduce the expense of software deployment and maintenance when applications are provided as virtual appliances. The burden of integration, testing, and maintenance shifts to the application vendor, and all of the conflicts that historically required you to run "one app to one box" are eliminated because each application is isolated in a virtual container. Additionally, the number of servers required for the infrastructure will be cut in half when utilization rates climb from the high teens to something in the neighborhood of 70 - 80% because multiple apps can now run on the same server without crashing.

When the leader (a monopolist no less) in the operating system space has to provide open specifications that enable other operating systems to control the applications, it is a strong indicator that the OS business is about to undergo massive changes. The days of the standard, general purpose operating system are definitely coming to an end.


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