Microsoft Starts Public Test of Rival to VMware

BOSTON (Reuters) - Microsoft Corp <MSFT.O> said on Thursday that it has begun public trials of virtualization software that will compete head-on with programs from VMware Inc <VMW.N>, saying the tests were starting ahead of schedule.
Shares in VMware, the world's fourth-largest publicly traded software maker, fell 3.3 percent and Microsoft shares rose 2.2 percent after the announcement on the release of the trial software, known as Hyper-V.
Microsoft said it previously told customers the first public release of the test version of Hyper-V would come out in the first quarter of 2008.
Global Equities Research analyst Trip Chowdhry said the trial version's release, which comes on the heels of <org idsrc="NASDAQ" value="ORCL%%%business,technology:::More information about Oracle Corporation:::http://topics.nytimes.com/top/news/business/companies/oracle_corporation/index.html">Oracle Corp's</org> <ORCL.O> unexpected entry into the market for virtualization software last month, is bad news for VMware.
Chowdhry said Microsoft's engineers have told him the company's Hyper-V is three times as efficient as VMware's product. Oracle has made a similar claim.
Reza Malekzadeh, senior director of product marketing and alliances for Palo Alto, California-based VMware, said that Microsoft's new software does not provide the stability or advanced management functions that his company's product does.
VMware shares fell $3.23 to $96.00 on the <org idsrc="nyt-org" value="arts,automobiles,books,business,college,dining,education,fashion,garden,giving,health,jobs,magazine,movies,multimedia,nyregion,obituaries,realestate,science,sports,style,technology,theater,travel,us,washington,weekinreview,world:::More articles about the New York Stock Exchange.:::http://topics.nytimes.com/top/reference/timestopics/organizations/n/new_york_stock_exchange/index.html">New York Stock Exchange</org>. That is more than triple their IPO price of $29 a share from the company's August initial public offering.
EMC Corp <EMC.N>, which owns 86 percent of VMware, fell 50 cents, or 2.5 percent, to $19.18.

Typically, server computers run one operating system that might utilize 10 or 15 percent of its power. A server using VMware software can simultaneously run five to 10 or more operating systems. Each of these systems becomes a virtual machine working as an independent server.
VMware says that companies can save about $600 per year and 7,000 kilowatt hours in electricity for every software application put onto a virtual machine.
Each server removed through virtualization saves 12.5 tons of carbon dioxide emissions, which is equivalent to taking 1.5 cars off the road, according to VMware.
VMware's shares hit a record $125.25 on October 31, on expectations that the software maker's technology was one or two years ahead of its competitors.