It seems that server virtualization is the buzzword for the industry right now. Having made its way into storage virtualization, VMware led its wide use in the enterprise server market. Last week, two other companies - start-up XenSource and software giant, Microsoft - rolled out their respective virtualization technologies.

XenSource announced XenOptimizer, while Microsoft introduced Windows Server 2003 R2, which supports virtualization technology.

XenOptimizer manages and monitors the utilization of storage, aims to ease configuration and helps to deploy dynamic provisioning. XenOptimizer is XenSource's first software that allows users to create virtual machines from physical ones.

Microsoft Windows Server 2003 R2 is designed to work closely with Microsoft Virtual Server, which supports 64-bit machines and clustering to enable failover. (See Network World's test of Virtual Server 2005.)

"We see virtualization becoming ubiquitous over the next 3 to 5 years," says Bob Muglia, senior vice president for Microsoft's Windows Server Division.

In October, Microsoft announced new virtualization licensing model for its Windows Server System. It is running a promotion in which a customer with Windows Server 2003 R2 Enterprise Edition can run four copies of Virtual Server Enterprise Edition for $99.

Dell also announced plans to offer customers bundles of PowerEdge Servers and Virtual Server 2005 R2.

"To help customers get started with virtualization, Dell is providing a complete Virtual Server R2 offering, featuring our PowerEdge 2800 Server, Microsoft Virtual Server 2005 R2 and the Windows Server 2003 R2 operating system - all prepackaged and delivered as a complete virtualization platform, at tremendous value," says Paul Gottsegen, vice president of worldwide enterprise marketing at Dell.

XenSource's Xen virtual-machine monitor and EMC's VMware compete with Microsoft's Virtual Server 2005.