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Microsoft did something that it rarely does last week when it announced availability of its Hyper-V server virtualization technology months ahead of schedule. Unlike Microsoft Virtual Server, which ran as an application, Hyper-V is a true hypervisor capable of hosting multiple instances of Windows and even Suse Linux.

OK, so Microsoft is in the game, but can it compete with server virtualization king VMware? Yup. According to ESG Research, 69 percent of organizations planning to adopt server virtualization are considering Microsoft technology, 59 percent are considering VMware, 10 percent are contemplating XenSource, and 4 percent are kicking the server virtualization tires with Virtual Iron.

Microsoft understands that server virtualization is a strategic IT initiative that has the potential to really disrupt the server-licensing landscape. In other words, server virtualization could take a bite out of Windows sales, if VMware wins in a landslide. Microsoft just won't let that happen.

As Hyper-V gains visibility, my colleague Mark Bowker expects Microsoft to:

1. Throw money and programs at its OEMs
   Microsoft will use its vast resources to run joint-marketing programs, educate customers, and generate leads with server vendors such as Dell, Hewlett-Packard, and IBM. The goal? Maximize visibility of Hyper-V in a hurry.

2. Use management as a Hyper-V complement
   Microsoft is currently in beta with its System Center Virtual Machine Manager (SCVMM), a management platform that controls Hyper-V and VMware ESX. As this becomes available, Microsoft can play a low-cost management card to introduce its hypervisor into VMware accounts.

3. Target the midmarket
   VMware is surprisingly strong in the SMB space, along with feisty Virtual Iron. Nevertheless, Microsoft has an army of channel partners and Windows consultants, who should be able to quickly penetrate this Windows-centric market segment.

   VMware is way too ubiquitous and strong to be "Netscaped," but Microsoft will certainly make the server virtualization space more competitive--in a hurry.

   Jon Oltsik is a senior analyst at the Enterprise Strategy Group.

BURLINGAME, Calif.--Chipmakers have been applying lessons learned in mobile computing to servers in an effort to increase efficiency by lowering power consumption. But a noted Google engineer threw some cold water on the approach on Monday, arguing the two styles of computing are too different.

"The data center is a different device than the key targets for mobile electronics, laptops, and mobile devices," said Luis Barroso, a Google engineer who closely studies the company's power consumption, speaking at the O'Reilly Velocity conference here.

And naturally, with at least hundreds of thousands of servers in operation and its data centers placed near power plants to cut electricity costs, Google is trying to get computing equipment makers more excited about efficiency.

"Maybe if you call this a land-held computer, perhaps they'll help us," he quipped, showing an aerial view of a sprawling Google data center.

The basic problem is that mobile devices and servers have different modes of activity.

Mobile devices have been improving through better exploitation of the fact that they spend a lot of time dormant with occasional bursts of activity. That lets processors and other electronics save power by spending most time in low-power sleep modes, then snapping awake for peak-power high-performance modes when necessary.

Google's servers, though, have the opposite type of activity: they spend most of their time doing modest amounts of work, with frenzied moments of peak activity and complete lulls a rarity, Barroso said. The measurements are based on measurements of about 5,000 servers performing four different Google applications, he added.

The company's servers simply can't go to sleep, he said. Each machine is "rarely fully idle," he said. "The fraction of time the servers are actually doing exactly nothing is very small."

Thus, Google is urging electronics designers to create products that more gracefully reduce power demands as activity diminishes. Servers naturally consume peak power at peak activity, but what's bad is that they still consume about half peak power when at zero activity.

Processors have gotten a bad rap for squandering ever more energy--indeed, Barroso himself, once a chip designer for Digital Equipment, has expressed such concerns. But chips actually are better than hard drives, memory, and network adapters at reducing power consumption during periods of moderate activity.

Some sophisticated hard drives, for example, can slow down their rotational speed to save power during periods of lower activity. However, "They need to bump to higher RPM to do something useful," to read and write, he said, unlike processors, which can actually still process data when in low-activity modes.

Microsoft on Tuesday said it's set to release near-final versions of its key database server and other business-oriented software.

The company announced a "release candidate" of SQL Server 2008, along with test versions of security and identity management software, at its TechEd conference in Orlando, Fla.

Also on tap for later this month is a release candidate of Microsoft Application Virtualization, version 4.5, the company said. Microsoft also announced a server-virtualization validation program, which lets software developers test and validate their code running against Windows Server 2008 and previous versions of the operating system.

Microsoft Senior Vice President Bob Muglia said Identity Lifecycle Manager 2, beta 3, a tool for configuring and managing identification on corporate networks, is now available.

Also released in beta testing is Forefront Security for Office Communications Server, beta 1, a tool that helps prevent instant messaging-based malicious software, the company said. In the first half of next year, Microsoft plans to incorporate within Forefront support for virtualization.

Muglia said the announcements are part of Microsoft's overarching Dynamic IT initiative for automating enterprise technology to make it more flexible.

Whenever a big technology vendor acquires another, rumors about success or failure are sure to follow. Generally there is a bit of a grace period, but six to nine months down the line, the grapevine gets active with tales of woe, and Wall Street really pays attention.

Symantec still gets questioned about Veritas, while EMC can't shake scrutiny about RSA. Now Citrix has joined this club as many industry and investment pundits are questioning whether Citrix got its money's worth when it bought XenSource last August. The doubting Thomases say that Citrix is failing in the virtualization server market and is slowly fading away and seeding this space to VMware and Microsoft.

When ESG's virtualization guru Mark Bowker heard these whispers, he asked Citrix for a few post acquisition server virtualization metrics to judge for himself. Based upon this information, it appears Citrix continues to invest in and benefit from its acquisition of XenSource and its server virtualization product, XenServer. For example, Citrix says that XenServer sales continue to double each quarter and that all the major x86 server vendors are actively bundling and shipping the product. Citrix has also increased the number of trained XenServer resellers from 300 to more than 2,500 in that timeframe. Finally, Citrix is making internal investments in sales and marketing staff and actually delivered a new version of XenServer this March. Sounds like progress to me.

In 1987, I entered the tech industry workforce and competed head-to-head with IBM for sales. At that time, IBM was masterful at a sales tactic called FUD (i.e. fear, uncertainty, and doubt), using innuendo and rumor as a way of dissing the competition. Times have changed, but FUD remains a key competitive sales tactic. In the Internet age however, sales-based FUD quickly turns into industry and Wall Street rumor.

The naysayers never die and Citrix is now caught in the vortex. The only way out is communications, continuing progress, and more success metrics like these.

There is a general paranoia about server virtualization in the security community that goes something like this. The server virtualization hypervisor acts as a resource switch enabling multiple virtual hosts to share a single physical system. In theory, if you compromise the hypervisor, you gain access to every virtual host along for the ride. Imagine an instance where 50 hosts live on a single Intel server and you can see that a hypervisor attack could have extremely serious ramifications.

Yes, this is theoretically possible, but virtualization vendors understand this threat and are pretty conscientious about protection. Starting with IBM and virtual machines on the mainframe, there hasn't been a single compromise at the virtualization operations layer that I know of. Of course software is always vulnerable, but a hypervisor attack seems like something out of a Michael Crichton novel rather than an everyday concern.

So what is it about server virtualization that should really keep chief information security officers up at night? A more pedestrian worry--lack of control. In a virtual server world, IT administrators can clone virtual hosts, move them around, or turn them on and off by accident or with malicious intent. What happens when an IT administrator moves a critical database server instance without re-configuring application servers or the network? How about when someone mistakenly adds a test server to the production network? The security "uh-oh" possibilities are endless.

The real threat here is that server virtualization takes on a life of its own without proper management and security controls. This is why VMware is investing in its virtual infrastructure, Citrix is keen on its Citrix Delivery Center, and Microsoft is pushing its System Center Virtual Machine Manager (SCVMM) architecture. Systems and operations management vendors like BMC Software, CA, Hewlett-Packard, and IBM are also paying close attention and adding virtualization capabilities to tools, processes, and services. Given its 30-plus years with mainframe virtualization, IBM for one has seen this movie before.

In the security world, there are theoretical threats and there are everyday threats. The server virtualization crowd is constantly dragged through the mud about theoretical threats but it's the everyday threats that tend to bite us all in the butt. If users focus on sound server virtualization policies, controls, operations, and safeguards, rather than the virtual security bogey man, they should be able to reap the benefits of server virtualization without a substantial increase in risk.

This blog has been updated with Dell executive and analyst comments.

It's not a blow-out quarter, but Dell investors will likely be pleasantly surprised.

The Round Rock, Texas, PC maker reported its first-quarter earnings Thursday, with revenue of $16 billion, a 9 percent improvement from a year ago, and earnings of 38 cents per share, a 12 percent increase.

Analysts were expecting earnings of 34 cents per share and revenue of $15.4 billion to $16.2 billion. In after-hours trading Thursday, shares of Dell were up 7.5 percent.

Following a turbulent 2007, Thursday's results were a more encouraging beginning for this year. "We're beginning to see positive results in our performance," founder and CEO Michael Dell said during a conference call with company investors Thursday afternoon. He pointed to growth in all business segments in all regions as the impetus. He said that while the industry grew 14 percent in unit shipments, Dell was able to grow 22 percent.

But is this the comeback that Dell has been promising, and investors have been waiting for? Not quite. However, it appears the company is at least on the right track. Though the No. 2 PC vendor in the world has fallen behind both HP and Acer in notebook sales, Dell showed improvement in the past year. Notebook revenue was up 22 percent over the past year, but just 2 percent from the previous quarter.

"I think our results demonstrate we made some progress, but still a lot more to be done," said outgoing Chief Financial Officer Donald Carty, who is to be replaced by Brian Gladden on June 13.

Cost reduction was one of the company's main goals in the past year. Dell reduced its headcount by 3,700 people during the quarter, many in its consumer products divisions and in international sales, for a total of 7,000 in the past year, according to Carty. The company said in the same quarter a year ago it planned on removing 8,800 positions. Dell also said it has added about 2,700 employees through acquisitions, bringing the net employee reduction to 5 percent, and Carty emphasized that more thinning of company ranks is coming.

The Wall Street Journal's Walt Mossberg interviews Michael Dell at the D6 conference this week.

(Credit: Dan Farber/CNET News.com )

It's been over a year since Michael Dell hit the reset button, promising to revitalize his company that had fallen behind its main competitor, Hewlett-Packard. Dell admitted publicly at D6 Wednesday that his company had indeed missed a few very big trends, including retail and a focus on consumer products.

It was also a year ago that after telling his employees the company's hallowed direct model was no longer "a religion," Dell products first began showing up in Wal-Mart stores. Now Dell PCs and printers are available at many of the major electronics retail outlets worldwide.

Carty specifically pointed to retail initiatives as one of the driver's of the better-than-expected quarterly performance. Dell added 2,000 more retail locations worldwide in the past quarter, including Costco in the U.S., Best Buy in Canada, and several large Chinese outlets, to bring the total to 13,000 locations around the world.

But it's still too early to tell if the company's momentum in retail can be sustained.

"Are they getting a pop because they've just entered retail?," asked John Spooner, analyst with Technology Business Research. "Retail didn't get it fully in place until this January, so I wouldn't pass judgment until Q4 this year."

Unfortunately the timing isn't great in regard to the U.S. economy. In the earnings announcement, Dell acknowledged "conservatism in IT spending in the U.S. particularly with its global and large customers as well as public, small, and medium business accounts." The company said it expects the conservative spending trend to continue on through summer.

However, the company is making huge gains internationally. For the first time in the company's history, sales outside of the U.S. reached 50 percent. Dell particularly has its eye on the booming Chinese market.

"We believe China is going to become the largest retail market in the world for PCs," Michael Dell said. Dell's unit sales increased 140 percent in China over the last year, and the company plans to reach 3,500 retail locations in China alone by the end of the next quarter.

China, as well as India, are becoming the place for Dell to experiment, not only with products, but with different business models and with customers with no previously established sense of what to expect from Dell.

"In China you can blast out a run of 1 million notebooks, call them Dell 'X,' sell to distributors, and do pretty well," said Spooner. It's a great way for the company to test out products and market strategies before bringing them to their more established markets.

And it's clear there's still more change to come. Michael Dell said the company is still planning to introduce many more new notebook models by the end of this year. He specifically mentioned an "active back-to-school" season. Besides the already announced Latitude E series, it will be interesting to see if this is when Dell decides to introduce the mini-notebook Michael Dell was seen carrying around with him at the D6 conference in Carlsbad, Calif., Wednesday.

LAS VEGAS--Like last month's RSA Conference, there is a sufficient amount of hype about virtualization here at Interop. From a marketing perspective, this is to be expected. The industry is ga-ga over virtualization, so everyone is jumping on the bandwagon. Beyond the spin however, server virtualization and networking are two of a kind as foundational technologies in next-generation data centers.

First off, virtual servers think they are physical servers and own the entire platform. Each virtual server wants all the bandwidth the physical server can offer, but in the virtual world, bandwidth is a shared service. This has the real potential to create a bottleneck on the network. When 1 car approaches a single lane toll booth, traffic congestion is not a problem. When 100 cars approach this same toll, instant gridlock.

The more virtual servers users implement, the faster we will see a transition to 10 gigabit Ethernet switching in the data center. Given the popularity of VMware and the rise of Citrix XenServer and Microsoft Hyper-V, this year may become a "perfect storm" for this transition.

The other thing to note about virtual servers is that they never stay put. In a virtual data center, VMs are constantly created, replicated, and moved. Networks need to understand these activities so they can continue to filter packets for security and route/switch packets to their end destination.

Here at Interop, lots of folks are saying that networks need to have "virtualization awareness," and I couldn't agree more. Citrix, Microsoft, and VMware need to work with Cisco, Extreme, F5, and Juniper to ensure that networks and virtual servers act as an integrated system, not a bunch of unconnected piece parts. This will help users as they build virtual data centers and help vendors sell more stuff. Oh yeah, and it will keep all of us networking geeks in Vegas at Interop each year for the foreseeable future.

Apple's tool for media management, Final Cut Server, is now available, the company announced Tuesday.

The software application is meant for managing the production of large-scale video projects. Final Cut Server enables automatic cataloging, viewing, and annotating of video, and is available for both the Mac and PC. It is integrated with Apple's video-editing software, Final Cut Studio.

The product was announced a year ago, was originally supposed to ship last summer, but was delayed.

Final Cut Server pricing starts at $999 for one server and 10 licenses, and $1,999 for one server and unlimited licenses.

IBM's latest supercomputer is hooked up to the watercooler.

Big Blue has come out with a new version of its high-end supercomputer, the Power 575, which can provide five times the performance of its predecessor on 40 percent of the power. A fully stocked Power 575 rack contains 448 processing cores.

An IBM technician inserts the copper piping.

(Credit: IBM)

A substantial part of the decrease in power consumption is due to a water cooling system that brings in chilled water from the outside, runs it through copper plates located above individual processors to absorb heat, and then draws the water out so it can expel the heat outside of the computer.

By getting rid of heat in this manner, the air conditioning requirements are greatly reduced for the "hydro cluster" 575. Air conditioning can account for roughly half of the power consumed by data centers. Conversely, instead of cutting electricity consumption, IBM, or one of its customers, could squeeze in more computing power into the same room and keep the air conditioning constant.

Computer makers have employed liquid cooling in various ways over the decades. Many liquids, and particularly water, can hold far more heat than air. Similarly, architects and building owners are experimenting more with liquid cooling and heating systems as energy prices rise.

"Water is about 4,000 times as efficient as air to cool a system," said Ross Mauri, general manager of Power systems at IBM.

The effectiveness of a water cooling system, however, depends largely on two parameters: how close you can get the fluid to the hot component and how cool you can get the liquid. In general, the closer the fluid to the chip and cooler the initial temperature, the better it works.

IBM, Hewlett-Packard and others have created blade server racks with integrated chilled water tubes. Chilled water circulates through the pipes but can't get as close to the hottest components.

The company has also created liquid cooling systems that fit inside computers and sit directly above hot components. These systems, however, have consisted of self-contained liquid vessels. The fluid heats up, rises, and then sinks again, but it stays moderately warm.

With the hydro cluster, "there is always chilled water in the system," Mauri said.

IBM isn't alone in its pursuit of brining liquid close to the chip. In February, the Tyndall Institute, a government-funded lab and incubator in Ireland, showed us an silicon impeller that can bring cooled liquids in close contact with chips. The impeller measures a few millimeters across.

The computer, along with a new Power 595 Unix server, sports a 5GHz chip, a speed bump over the existing 4.7GHz versions that have been on the market.

Unix and RISC servers, IBM wants you to know, aren't dead. In 2007, industrywide Unix server revenue grew 1 percent, Mauri said, the first time the market has grown in six years.

IBM also has been aggressively taking share from competitors Sun Microsystems and Hewlett-Packard, he added. In five years, IBM has gained 11 percent in market share, according to IDC numbers cited by Mauri, while HP and Sun have lost share.