While EMC  subsidiary VMware has garnered the bulk of attention regarding server virtualization, a slew of vendors are looking to address what they see as rising demand for this server consolidation technique.

At the top of that list is Microsoft, which earlier this fall aired plans for Virtual Server 2005. Like other server virtualization technologies, Virtual Server 2005 lets users divvy up servers so that they can support multiple operating system instances and applications. The software, scheduled to ship next year, is based on technology obtained via the acquisition of Connectix early last year  that works on Windows, Linux and Macintosh servers and workstations.

Also entering the market are a gaggle of lesser-known players, such as Leostream and PlateSpin , whose products offer management, security and other such capabilities for virtualized systems.

"Virtualization is moving from a niche market into the mainstream, especially since Microsoft entered the market," says David Crosbie, CEO of Leostream, whose software manages virtualization servers attached to storage-area networks (SAN ).

But it is VMware, which EMC paid $635 million to acquire  earlier this year, that sparked the server virtualization movement. Recently, the EMC subsidiary held its first annual customer conference, where VMware and others announced the latest developments in server virtualization.

VMware announced that it would extend the capabilities of its Virtual SMP offering to dual-core and four-processor symmetrical multiprocessing servers. The company, which already offers dual-processor SMP software, is doing this for two reasons. First, VMware officials say that even though most server workloads run fine on two-processor servers, 15% to 20% of customers require machines with four processors. Also, VMware is trying to keep pace with next-generation servers powered by Advanced Micro Devices (AMD) and Intel processors.

"If you look at processor trends, both Intel and AMD have shifted from increasing the clock speed of their processors to increasing the number of processor cores on a single chip," says Michael Mullany, vice president of marketing for VMware. "Going forward, you are going to find out that even a two-CPU server actually has four processors."

VMware, which was founded in 1998, has partnerships with Citrix, Dell, HP, IBM, Oracle and Red Hat, among others. Gartner says VMware owns the bulk of the virtualized server market and will control about 80% of it by the end of next year, though the research firm figures Microsoft will start to challenge VMware over the next couple of years.