Too late to kill off VMWare

No, Microsoft have missed the boat. It's not about licence costs, it's about: Installed base; established skills; the whole ecosystem which has already built up around virtualisation with VMWare. It's one thing to have a virtualisation engine, it's another thing to have a global base of practitioners, a layer of ISVs offering add on products, and specialist houses (or boutiques within IT Services companies) with experience of using the product over time.

And with some of the newer x86 processors, the bottlenecks which VMWare used to hit are being removed and mitigated. In terms of straight box count, a well stacked out Sun x4600 box can now take 10s of VMs. It will take Microsoft years to get from GA of virtualisation to being a "safe alternative" to VMWare.

I think the fat lady has sung.