As anticipated, VMware has created a free version of its server partitioning software in the hopes of drawing new customers to its technology. In addition, the move counters open source rival XenSource, which gives away core server virtualization technology known as a hypervisor.

The free product will be called VMware Server and will join the Workstation, GSX Server and ESX Server products. VMware Server relates most closely to the midrange GSX Server product often used by VMware customers to test and and develop software packages. The high-end ESX Server is used for production applications and actually slots in below operating systems such as Windows and Linux, whereas GSX Server and the upcoming VMware Server run on top of the OS.

When plugging VMware Server, which arrives in beta only for the moment, company representatives insisted that we think of the free option as a way to promote virtualization technology.

"There are huge segments of the audience not aware of virtualization," said Raghu Raghuram, a vice president at VMware. "Some people have very naive notions about what virtualization is all about. We are planning to change that."

VMware first hinted that it may be heading in this direction in our interview with company chief Diane Greene. When asked about the free product possibility, Greene said, "I don't know if that's what we'll do, but I don't see anything bad about it. I don't know how the software may get packaged. One thing for sure is that we'll keep adding a lot of value. If our software doesn't add value, then fine. We'll do other software. I think we are adding unbelievable value right now."

We like to think she took our advice.

VMware Server should get more people to try out this technology that lets them run multiple operating systems and applications on a single x86 server. More importantly, however, from a competitive standpoint is its strength against Xen - the free hypervisor for Linux systems.

The VMware Server, for example, has a feature not even present in GSX Server. It supports Intel's VT technology for improving virtualization performance. In addition, it supports 64-bit guest operating systems - including Solaris x86 - and has support for virtual SMPs. So, it's not just some crippled, low-end product.

Raghuram downplayed VMware Server as a response to Xen.

"Xen is only for serious, bleeding-edge Linux enthusiasts," he said. "You have to live with a highly unstable open source product that's of little interest to the average system administrator."

It should be noted, however, that Xen will ship as a standard package in the upcoming server releases of Red Hat and SuSE, giving XenSource an immediate route to customers wanting to try the technology. Xen also boasts very high performance. (Incidentally, VMware gained traction by becoming popular first with Linux enthusiasts, so it might not be such a bad play for XenSource.)

The release of VMware Server might give Microsoft some grief as well. Redmond has been offering price breaks on its Virtual Server product. Free beats price breaks every time.

VMware made the move to free more quickly than expected, and it has done so in an interesting way. It could have issued a free version of ESX Server and turned off some key features. Instead, it's simply going after the "try before you buy" crowd that might also be experimenting with Xen.

VMware's decision buys it some more time to keep selling ESX Server at full price. It does seem though that it will lose out on those Linux customers who are ready to embrace virtualization and would prefer to use Xen for free instead of paying for ESX Server. It's hard to gauge how big of an audience that is.

VMware also has something called the VMware Player, which allows customers to run but not create virtual machines for free. It has been downloaded more than 1m times, according to the company.

Next week, a beta version of VMware Server will be available here. The product is expected to be fully baked in the first half of this year, and VMware expects to sell plenty of support contracts behind it. Over time, it will effectively replace GSX Server. ®