Microsoft just announced the Virtual Server 2005 R2 Enterprise edition available as free of charge. This is great but customers and analysts are asking themselves why the price of this product dramatically dropped over time until today. Trying to mitigate speculations the company arranged and released an interview with Zane Adam, Director of Product Marketing in the Windows Server Division at Microsoft. He stated about the cut-price:

PressPass: Why is Microsoft making Virtual Server available at no charge? Adam:...we want to make virtualization more broadly accessible and affordable so our customers can realize benefits in areas like server consolidation, disaster recovery, application re-hosting, and software test and development. We believe that Virtual Server is already the best server virtualization technology for the Windows Server System and more than 5,000 customers are using the product today. ... In the Windows Server Longhorn wave, virtualization will become part of the Windows platform via Windows hypervisor technology, and our customers will be able to run an unlimited number of virtual operating systems on one physical server running Windows Server Longhorn Datacenter Edition. In light of this and other market trends, I believe customers will think twice before spending thousands of dollars for other virtualization products that very well could be at no charge in a couple of years.

Talking about the first part of this quote I never heard Microsoft giving away a technology for free when it aims to spread it as much as possible, mostly if the company considers it the best technology on the market. In the second part Mr. Adam is obviously referring to VMware ESX Server. He fundamentally said customers should not invest in VMware technologies since they now can have Virtual Server 2005 for free and within 2 years will have the Windows Hypervisor for free as well. Is Microsoft pretending upcoming VMware Server and Xen (now freshened with Virtual Iron 3.0) are not existant? Is Microsoft pretending companies to wait 2 years for a product that could change in any moment and competitors are offering today? Is this the Redmond giant strategy? Really? Read my insight about Microsoft stragegy to have a better picture of how the company is moving and why had to release Virtual Server 2005 for free.