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It seems fair to say that once a technology becomes the subject of price wars, it isn't a new technology anymore. As Lazard Capital Markets analyst Joel Fishbein notes in a research report, Microsoft Corp. [MSFT] has brought that new level of maturity and competition to the virtualization technology sector, just months after VMware Corp.'s [VMW] stunning IPO put virtualization on the map.
As Microsoft kicked off its Virtualization Deployment Summit, it made a flurry of announcements outlining its strategy to take on VMware, including the acquisition of desktop virtualization technology maker Calista Technologies Inc. and an expanded relationship with Citrix Systems Inc. [CTXS], which last year made a bold move into the virtualization space when it acquired XenSource Inc. for $500 million.
While Microsoft is still widely regarded to be a ways behind VMware with its virtualization technology, it pulled something else out of its bag of tricks this week: a promise to cut the cost of licensing Windows on virtual machines to $23 per year, from $78.
"We think the price cut represents potential risk for VMware," Fishbein noted in the report. - Andrea Orr
See Jan. 22 announcement from Microsoft
See Aug. 14 story from TheDeal.com
See August 2007 story from TheDeal.com
See August 2007 post from Tech Confidential
