Shrugging off challenges from rival upstarts touting better technology, virtualization leader VMware Friday released a free beta version of its software for creating multiple operating systems on a single machine.Like its existing GSX and ESX Server versions, the new entry-level VMware Server can partition Windows and Linux servers into multiple virtual machines running Linux, NetWare, Solaris x86 and Windows, as well as 64-bit operating system, according to the Palo Alto, Calif. unit of EMC. VMware Server also lets a single virtual machine span multiple processors within a single box and can take advantage of Intel Virtualization Technology (VT) on some upcoming Intel server-oriented processors.VMware was the first vendor to offer virtualization technology, previously available only on mainframe and Unix computers, on commodity Intel-based servers when it launched 1998. VMware's products are used by 20,000 companies.A slew of mostly Linux-based virtualization startup companies, however, are challenging VMware's dominance. They say VMware's method is slower than their newer "paravirtualization" approach, which tweaks the processor instructions in guest operating system kernels so that they work better with resident hardware."VMware is emulating an entire chipset in software. It's slow. We run on the bare metal," said Simon Crosby, CTO of open-source virtualization vendor XenSource."VMware has done a good job of pioneering the virtualization market," said Mike Grandinetti, chief marketing officer for Virtual Iron Software. Virtual Iron, in addition to using paravirtualization to run multiple operating systems on a single machine, can also spread workloads across multiple machines in a cluster-like manner. "But VMware cannot scale to enterprise-class workloads. It just runs out of steam."But VMware's rivals don't today support Windows. Microsoft, which has its own Windows-only virtualization product, Virtual Server 2005, prevents paravirtualization vendors from modifying Windows.Meanwhile VMware, through its full emulation, already supports Windows and other operating systems, XenSource, Virtual Iron and others have to rely on the new Intel or AMD chips with built-in VT to offer Windows. That means they need to convince would-be customers not only to move to virtualization but also to buy new hardware -- a costly move that runs counter to the virtualization market so far, said Charles King, an analyst with Pund-IT of Hayward, Calif."VMware has done well by managing to open up and drive the conversation on how to gain additional value from your low-value machines," King said. "As popular as Linux has become -- and is still becoming -- the market for Linux servers remains just a quarter of the size of the Windows server market. Xen and Virtual Iron are aiming big guns at a relatively small market."Take, for example, Central Transport International, which said it saved $250,000 last year by consolidating more than 50 Windows servers into 10 by using VMware GSX and ESX Server software, according to Craig Liess, Central Transport's server administrator.The Warren, Mich.-based trucking firm hopes to have half of its servers, including parts of the firm's imaging system and its mission-critical intranet, running virtual environments by year's end. Though Central Transport runs some Linux servers, the vast majority are Windows servers that Liess doesn't plan to swap to Linux anytime soon.XenSource's Crosby, however, argued that firms such as Central Transport are throwbacks. Companies, once they see the increased performance from upgrading to VT-based Linux servers running Xen, will embrace them."AMD and Intel have simply out-invented" VMware, Crosby said. "The real ramp-up of virtualization, we believe, is to run Windows with high performance. Why use what is basically a 10-year-old technology?"At least one analyst believes that the new Intel chips with built-in VT and upcoming AMD Opteron processors will level the playing field. Gordon Haff, an analyst with Nashua, N.H.-based Illuminata, said the performance of VMware's flagship ESX Server will be "pretty similar" to Xen by then.In the long run, analysts say virtualization itself will become a commodity as it gets built into more operating systems. Windows Longhorn Server, for instance, should introduce built-in virtualization by the turn of the decade, said Haff. VMware and its rivals are already moving up the stack and providing tools that manage multiple virtual environments, he said.