When it comes to x86 server virtualization, VMware, of course, seems to get all the attention. Of late, there has been more written about the open source Xen hypervisor (and XenSource, the corporation formed to support it), Virtual Iron and Microsoft (read more in “Virtualization: Xen and the art of hypervisor maintenance”). But one company – SWsoft – is often left out of the discussion.

For one thing, SWsoft takes a different approach to carving up x86 machines. Unlike the others, SWsoft slices above the operating system, meaning that a single instance of an operating system can be carved up into multiple virtual servers. It’s similar to what Sun does with Solaris containers.

It’s an interesting approach and one that has been very successful with service providers that need to host multiple customers on a single piece of physical hardware. In the last few years, SWsoft has been improving its offering for the enterprise with a product called Virtuozzo. I’ve spoken to several IT execs that have opted for the SWsoft route.

But just last week, SWsoft acknowledged that it owns virtualization newcomer Parallels. According to an SWsoft spokesman, SWsoft acquired Parallels three years ago when Parallels “was very tiny.” Since then, both SWsoft and Parallels have raised their profiles in the virtualization market. In fact, last week SWsoft announced that its revenue grew 133% in 2006 and that revenue from its Virtuozzo and Parallels product lines grew 734%.

The SWsoft-Parallels tie-up puts a whole new perspective on the SWsoft story. Parallels takes the same approach to virtual machine as VMware or Xen, meaning it slices up a single physical server into multiple virtual machines that can run different operating systems. This means SWsoft and Parallels can offer customers a choice since they provide two different approaches.

Parallels and SWsoft will remain separate entities with their own brand and Web sites.

The CEOs of the two companies put it this way in a memo to their employees:

“The combination of SWsoft and Parallels means that we are the only company in the world to provide a complete suite of virtualization and automation software that includes operating system virtualization (Virtuozzo), desktop virtual machine technology (Parallels) and our range of automation solutions across all major computing platforms including Windows, Linux, MacOS and beyond.