VMware, a young Silicon Valley company, is the early leader in a fast-growing market for what is called virtual-machine software. And that puts it on a collision course with Microsoft, the industry’s Goliath.

A virtual machine essentially mimics a computer so that several copies of an operating system — say, Windows or Linux or both — can run on one physical machine. It allows computing chores to be done on fewer computers, using less electricity and taking up less space, promising a way to control costs at corporate data centers straining to keep up with the ever-increasing demands of the Internet age.

It is also a product that occupies strategic ground in computing, as a layer of code that resides between a computer’s hardware and the operating system, usurping some tasks, and potentially undermining the importance of the operating system.

In a meeting with corporate customers in New York last month, Steven A. Ballmer, Microsoft’s chief executive, said, “Everybody in the operating system business wants to be the guy on the bottom,” the software that controls the hardware. And he vowed that Microsoft, whose Windows operating systems are the main source of its corporate wealth and market power, would “compete very aggressively with VMware.”