Speaking to InformationWeek about Citrix's acquisition of VMware competitor XenSource, the company behind the Xen open source hypervisor, Citrix VP Wes Wasson says his company plans to maintain "a great relationship with Microsoft."
We work with Microsoft on things that are years in advance. Microsoft is tremendously willing to do that when you're not pretending that things that should go into the operating system [such as the virtualization hypervisor] are not available to them and will be supplied somewhere else. VMware is thinking of itself as an operating system vendor and Microsoft competitor. They want to compete with the Windows operating system.
Of course VMware wants to compete with Microsoft. But I don't think it's the OS space VMware is focusing on. Mendel Rosenblum's prediction made clear it's the hypervisor space that's at issue. And Microsoft's existing deals with Novell and XenSource (which focus on virtualization) demonstrate that Microsoft wants to be competitive in that space, too.