Virtualization Space Opens Up

At $499 per socket on a perpetual license, Virtual Iron is the clear price/value leader in the market, Grandinetti said. Humphreys said Virtual Iron offers many of the same capabilities as VMware at just 20 percent of the cost.

XenSource has priced its XenEnterprise software starting at $488 for an annual subscription license per dual-socket server, while a perpetual license per dual-socket server costs $750.

But is it ready?

Open-source technology is slowly changing the dynamics of the virtualization market, said Mitch Northcutt, president of Rapid App, a Chicago-based solution provider that handles many virtualization projects using technology from Citrix Systems, VMware and Microsoft. But Northcutt said he is not "convinced that open-source technology is suitable for production yet. I think it's still a test and development technology."

"We are keeping our eye on open-source solutions," said Eric Sugar, manager of the business solutions group at ProserveIT, a Scarborough, Ontario, reseller of Virtual Iron and VMware products. "But, for now, we see VMware as the only production-ready solution for mission-critical environments."

Open-source solutions are not market-ready, said Steve Kaplan, president of AccessFlow, a Sacramento, Calif., integrator that works with virtualization products from Citrix Systems, Microsoft and VMware.

"VMware is stable and proven," Kaplan said. "VMware solutions save companies thousands of dollars over time. Why would companies risk moving their data center virtualization solutions to unproven technology just to save a few dollars in licensing fees?"

Kaplan added that VMware works so well that it is almost maintenance-free, making it an easy sell.

Of course, open-source proponents have a different perspective. Though they admit customers have to pay more for professional services, they pay less in licensing fees.

In addition, functionality, once the Achilles' heel of open-source vendors, has improved. Products from Virtual Iron and XenSource offer more value for the money than those from market leader VMware, an EMC company, proponents say.

"Ultimately, the open- source vendors will open up the market by providing comparable solutions to VMware at much lower prices," said Jason Sparks, chief technology officer of solution provider Structured Communications Systems, of Portland, Ore.

Solution Providers Take Care of Business

It was Virtual Iron's low prices and improved functionality that paved the way for Structured Communications Systems to complete a production environment project at $150,000 less than the price of a comparable VMware solution, Sparks said. And, as a bonus, "because the technology is so new, we were able to charge more for our services," he said.

Ken McLaurin, senior product marketing manager for virtualization for Akibia, a Westboro, Mass., solution provider, made a similar point. "Organizations that can implement Xen, for example, are favorably positioned with customers because their talent is at a premium," McLaurin said.

Akibia delivers virtualization solutions using technology from various vendors, including Microsoft, Novell, Red Hat, Virtual Iron and VMware.

But despite his endorsement of open-source solutions, McLaurin admitted that Akibia has no customers that are using open-source virtualization in production environments.

"Xen is primarily used in testing and evaluation systems," he said.

Nevertheless, some solution providers say they believe open-source technology will eventually change the market, even if those changes take some time. "Some of our customers say VMware is very expensive and are requesting alternative solutions that can provide an improved ROI [return on investment]," McLaurin said, who added he favors Xen for its value.

Xen is a virtual machine monitor for x86 systems that supports the execution of multiple guest operating systems with high levels of performance and resource isolation.

Xen is the technology around which Virtual Iron and XenSource have built their virtualization solutions.

Carl Eschenbach, executive vice president of worldwide field operations for VMware, also in Palo Alto, said he isn't too worried about competition from the open-source camp. "Open-source competitors have not hurt VMware at all. We don't see them in our channel; our sales continue to grow," Eschenbach said.

Fighting it out

VMware and open-source rivals are not the only contenders. Other virtualization solutions include SWsoft's Virtuozzo and Microsoft's Virtual PC 2007.

Virtuozzo enables a single Linux or Windows operating system to be dynamically partitioned into multiple, highly efficient virtual environments.

Next Page: Virtual PC 2007