Third Option

Less hardware is good, but immature technology isn't. With new products on the way, companies may find better methods to speed up virtual server deployments and cut costs.

Price was one differentiating factor between the two leading vendors, but both VMware and Microsoft offer some free software. VMware made its Server product free in February 2006, and Microsoft did so with Virtual Server 2005 two months later. But VMware's hypervisor-based ESX Server comes with a cost—ranging from $1,000 to $5,750 per two processors—and Microsoft hasn't decided the price for its next release.

For the cost-conscious, another option exists: open-source software, known as Xen, offered in enterprise versions by vendors like XenSource and Virtual Iron.

Despite VMware and Microsoft's market lead, Xen has its followers. Early last year, Jason's Deli, a chain of eateries in 21 states, was using VMware to deploy virtual servers. At the time, enterprise application developer Neal Cowles was evaluating e-mail servers but didn't have the resources to devote an entire server to one piece of software. With virtualization, he created separate environments for the test, all on one physical machine.

He saw an improvement in performance overhead, or fewer delays in the software: With XenSource's XenEnterprise, there were 5% delays, compared with 10% with VMware. (VMware, however, disputes the finding, claiming Xen hypervisors have twice the overhead of ESX Server.) Cowles went with XenSource, while still running some VMware, but also looked at Virtual Iron.

When it comes to cost of hypervisor-based products, Cowles says there's no comparison with open source. Virtual Iron's Enterprise Edition costs $499 per socket. XenSource charges just under $1,400 per processor, including licensing and maintenance. (VMware, for its part, says it offers more features for the price.)

"It's a complicated decision," Cowles says, "but I would recommend Virtual Iron or XenEnterprise over [VMware] from a price perspective."

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