How does one compete with low-ball Microsoft pricing? By making one's offering available for free, of course. This morning, virtualization leader VMWare announced that it's offering a free software virtualization server, dubbed VMWare Server. This product will compete with the suddenly inexpensive Microsoft Virtual Server products.

Just how inexpensive is Virtual Server? Microsoft announced last month that customers who acquire one license for Windows Server 2003 R2 Enterprise Edition could obtain the high-end Virtual Server 2005 R2 Enterprise Edition at a reduced price of $99 through June 30, 2006. But even the standard Virtual Server pricing isn't exorbitant: Virtual Server 2005 R2 Standard Edition retails for just $99, and the regular retail price of Enterprise Edition is just $199. Previous to the R2 versions, Virtual Server cost $499 for Standard Edition and $999 for Enterprise Edition.

VMWare says the industry's new pricing models suggest that virtualization is going mainstream. The free VMWare Server product, a successor to the fee-based VMWare GSX Server, will capitalize on the company's superior virtualization technologies and provide features that Microsoft doesn't. For starters, VMWare Server runs on both Windows and Linux. And unlike the Microsoft offering, VMWare Server will support 64-bit guest OSs such as Windows XP Professional x64 Edition.

Virtualization products such as VMWare Server, Virtual Server, and the client-based Microsoft Virtual PC let users run complete OS environments in software-based virtual machines (VMs). Although interactive virtual environments run at only a fraction of the speed of true hardware-based OS installs, they are useful for testing and Help desk scenarios. Server-based VMs, however, are increasingly useful for consolidating legacy servers in a central location. Because they aren't typically used interactively, server-based VMs often perform surprisingly well.

A beta version of VMWare Server is available now for download from the VMWare Web site. The company says that the final version of the product will ship sometime in the first half of 2006.

http://www.vmware.com/products/server/