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It’s time for VMware to have real competition in the x86 virtualization space, claim Virtual Iron officials—and they believe they can fill that role.

The Lowell, Mass., company on Oct. 11 is releasing Version 3.0 of its namesake virtualization platform, an offering that is based on the Xen open-source hypervisor, supports Intel’s on-chip virtualization technology and comes in three editions designed to compete with VMware offerings on performance while beating them on price.

“The market has been looking for an alternative, and we believe we offer the enterprise-level server virtualization products to the market that compete well with VMware on every level,” said Mike Grandinetti, vice president and chief marketing officer at Virtual Iron.

Grandinetti pointed to the fact that 23 of 25 beta testers for Virtual Iron 3.0 were VMware users and that more than 20 of Virtual Iron’s global third-party partners also sell VMware products as proof points of a growing demand for VMware alternatives.

Virtual Iron 3.0 enables users to run 32- and 64-bit operating systems unmodified in virtualized environments and automate such tasks as new server and application provisioning and the dynamic movement of workloads. It also monitors physical systems and responds automatically to availability problems.

The enhanced product comes in three versions, including the Professional Edition, a free offering that enables users to virtualize and manage a single server, up to two sockets. The Consolidation Edition is designed specifically for server consolidation projects and offers virtualization of multiple server configurations, advanced management and physical-to-server migration.

The Enterprise Edition offers management capabilities in multiple server environments for such needs as provisioning, live migrations, high availability, policy-based automation and capacity management.

Those editions match up well with VMware offerings as far as performance goes, and cost less, Grandinetti said.

It’s such management capabilities that will enable Virtual Iron to compete with VMware, he said.

“The basis of competition is not at the hypervisor level,” he said. “Those days are over. The basis of competition is, Can you manage the next-generation data center, which is virtualized?”

Gordon Haff, an analyst with Illuminata, in Nashua, N.H., agreed.

“The services and the management are clearly what’s going to be important going forward,” Haff said. “Hypervisors over a fairly short period of time are going to get uninteresting. … The story over the long term is going to be about management. The hypervisor is really just an enabling technology.”

Right now there are a host of different types of companies getting into the virtualization management software field, from systems makers to established management tool vendors to pure-play virtualization companies to startups, all trying to capitalize on the hot technology trend, Haff said.

“It’s a pretty confusing, complicated situation right now,” he said, adding that vendors are both cooperating and competing with each other.

That said, customers are beginning to look at virtualization as more than simply slicing up physical servers to run multiple operating systems and applications on them, and instead are taking a larger view of what it can do, such as archiving and dynamically moving workloads around, with it all being controlled from a single location, Haff said.

The industry is high on the technology. Research firm IDC, of Framingham, Mass., predicts that the market will reach $15 billion by 2010.

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