One of the challenges that Microsoft faces in competing with VMware in the enterprise is the substantial technology lead that VMware enjoys over Microsoft's Hyper-V offering.
In particular, VMware is pretty far along in delivering advanced management services that are required to truly scale virtual machine deployments. So it's with some interest that Microsoft recently allied itself with Cloud.com to gain access to advanced open source virtualization technologies for managing Hyper-V environments in the cloud.
Under the terms of the agreement, Cloud.com will work with Microsoft to deploy OpenStack, an advanced set of virtualization technologies on top of the Azure cloud computing platform from Microsoft. OpenStack is a suite of open source technologies based on the Nebula cloud platform originally developed by NASA and managed by Rackspace.
According to Peder Ulander, chief marketing office for Cloud.com, this will help Microsoft wrap more sophisticated virtualization management tools around Hyper-V deployments in the cloud. Obviously, it also means that customers should be able to leverage the benefits of that integration work in their own Hyper-V deployments because the work being done by Cloud.com to integrate with Hyber-V will be freely available.
The challenge that Microsoft faces right now is that VMware is the dominant force in the enterprise, while cloud computing providers have tended to embrace the Xen open source virtual machine. The headway Microsoft has made seems to be coming from the small to medium business (SMB) sector that appreciates the bundling of Hyper-V with Windows Server 2009 R2.
Unless Microsoft starts delivering more advanced virtualization capabilities soon, this is likely to be the status quo for years to come. Of course, Microsoft may want to keep things that way. Layering advanced management capabilities on top of Hyper-V might make some of the features in Windows Server 2008 appear redundant. And if Microsoft were to do that, it would essentially be validating VMware's case in the market.
As there are no signs of a chill coming from the netherworld, don't look for anything more radical from Microsoft than a few interesting partnerships any time soon.