Underexposed

Virtual Iron, a start-up aiming to commercialize the open-source Xen virtualization software, has raised $20 million.

The investment include Highland Capital Partners, Matrix Partners, Goldman Sachs, Intel Capital, and SAP Ventures, the Lowell, Mass.-based company said. Total funding for the company now has reached $65 million, the company said Monday.

Virtual Iron had "dramatic growth" over the last 12 months, and the new funding round was at a higher valuation, the company said. It didn't release particulars, but did cite IDC statistics saying that spending on server virtualization is growing at 60 percent per year and that Virtual Iron is growing faster than the overall market.

Virtual Iron also grown internationally, with 40 percent of revenue from outside North America, and has distributor deals with Avnet and Tech Data.

Virtual Iron competes chiefly with virtualization powerhouse VMware. However, it looks like the company has its sights set more on the host of second-tier alternatives, including Citrix Systems' XenSource, Microsoft's forthcoming Hyper-V, and Parallels' forthcoming Parallels Server.

"Virtual Iron is the only competitor to VMware in the market that has the features to support the high-value use cases for virtualization such as dynamic workload management, fault tolerance, and disaster recovery," said David Skok, a general partner at Matrix Partners.

Parallels on Monday added some higher-end features to its Virtuozzo software, that subdivides a single server operating system into several semi-independent virtual partitions.

With the release of version 4.0 of Virtuozzo Containers, the company also finalized its planned name change from SWsoft to Parallels. The company's newer name refers to a second virtualization product line that lets several separate operating systems run on a single machine, most notably Windows on Apple computers; Parallels also sells management software to control the different virtualization technologies.

Virtuozzo Containers 4.0, which costs $2,500 for a dual-processor server, includes several higher-end features:

•  Support for Windows Server 2003 and Red Hat Enterprise Linux high-availability clustering, a feature that lets one machine take over when another has failed.

• Support for real-time backup using Linux and Windows.

• Backup tools, including a scheduler and the ability to clone a virtual container.

• New resources controls such as the ability to set limits on bursts of CPU activity.

Most virtualization work today is focused on hypervisors and related technology to run multiple operating systems simultaneously, but there are advantages to the containers-level approach in some circumstances. For example, memory can be used more efficiently and some virtualization performance bottlenecks are avoided.

In its Linux incarnation, Virtuozzo is based on an open-source project called OpenVZ.

Correction 7:45 a.m. PST: I got the sensor bar and the Wiimote's duties mixed up. Names notwithstanding, the sensor bar has the infrared LEDs, and the Wiimote actually has the cameras that detect the signals.

I support the hardware-hacking philosophy on principle, but most of the movement's labors have left me uninspired. That all changed when I started seeing the uses that Carnegie Mellon researcher Johnny Chung Lee has found for the Nintendo Wii's infrared remote control.

In a collection of videos, notable for their lucid explanations, the Ph.D. graduate student from CMU's Human-Computer Interaction Institute shows exactly how versatile the "Wiimote" system can be. Among the uses he convincingly demonstrates: a virtual-reality head tracker; a virtual whiteboard on a wall, tabletop, and laptop screen; and a Minority Report-style arm-waving and finger-pointing multitouch user interface.

The Nintendo game device includes a bar-shaped device, ordinarily placed atop a TV screen, with two LEDs, or light-emitting diodes. It emits infrared light that the Wiimote can detect within a 45-degree field of view. Lee uses a computer to process data from those components and dramatically expand their utility.

By attaching the sensor bar to his head and the Wiimote to a TV, he was able to construct a system that knows where his head is located. That information is then fed into an algorithm that changes the perspective of an image on a monitor. The result is a very convincing 3D feel that looks like it would be a great fit for video games.

The whiteboard application relies on use of a pen with an infrared LED in its tip. After a quick calibration--the subject of Lee's thesis--a computer can track where Lee is "drawing" on a wall, tabletop, and laptop screen.

Perhaps the most mainstream potential comes with Lee's Wiimote-based multitouch user interface.

Lee attaches small reflectors to his fingertips, which the sensor bar can track. The result is a user interface that can respond to gestures such as pinching and swiping. And by tracking four points, it enables the "multitouch" abilities that are all the rage with Apple's iPhone and MacBook Air as well as the Microsoft Surface "Milan" project.

Lee's open-source work has traveled beyond his own domain. Cynergy Labs' Maestro project shows the Wiimote-based multitouch system in action. And his work has spawned a discussion site called Wiimote Project.

Lee also is notable for another practical design, a poor man's steadycam.

If market-leading VMware, open-source incumbent Xen, and Microsoft's upcoming Hyper-V aren't enough choices, another one is on the way: Parallels Server.

SWsoft, which is in the process of renaming itself Parallels, released its first beta version of the server virtualization software Wednesday. SWsoft itself has chiefly focused on commercializing higher-level virtualization software called Virtuozzo that lets a single version of an operating system be subdivided into semi-independent containers. However, the company's Parallels division has come to prominence by letting a single computer--most notably an Intel-based Apple machine--run Windows.

That Parallels technology is now available as a hypervisor that runs on a computer's "bare metal," a contrast to the previous technology that runs on top of a host operating system such as Mac OS X. The hypervisor approach, also employed by VMware's ESX Server, Xen, and Hyper-V, is generally preferred for servers to the guest-host model.

Parallels Server's claim to fame over its rivals is its ability to run multiple versions of Mac OS X, and it's "the first to run multiple copies of Mac OS X Server on a single Apple computer," the company said. The server beta also is the first hypervisor to support Intel's second-generation VT-d virtualization hardware, though it's still at the experimental level, the company said.

Those are interesting accomplishments, but they don't seem to me to be the competitive breakthroughs that will dent VMware's prevailing dominance. Apple's Xserve machines account for only a tiny slice of that market compared with those running Windows and Linux, and support for the latest Intel hardware doubtless will spread to rival hypervisors.

So it's probably a good thing for SWsoft/Parallels that it also has its Parallels desktop, Virtuozzo, and virtualization management software lines up and running. Parallels Server could well appeal to the sizable number of customers who already have Virtuozzo and accompanying management tools installed. Those folks might want to expand into new virtualization territory. To take one niche where Virtuozzo found early success, Web site hosting companies could offer more independent partitions to customers who are sharing a server.

Those who wish to test the Parallels Server beta software can apply at SWsoft's Web site.

Correction, 3:40 p.m. PST Wednesday: This posting misstated Parallels' beta testing plans. Virtuozzo 4.0's first release candidate just entered testing.

SWsoft, a start-up selling the Virtuozzo server virtualization software, has renamed itself Parallels after a product line better known among consumers that lets Windows run on Intel-based Macs.

"When we talk to partners, media, analysts, the channel, and customers, we need to deliver a simple and unified vision. We need to look like a company which has products that fit together well," said Chief Executive Serguei Beloussov. SWsoft didn't initially disclose that its two main product lines, Virtuozzo and Parallels, were run by the same company.

In addition, the company is branding its virtualization and management products under the umbrella term Optimized Computing.

Virtuozzo uses a technology generally called containers that splits a single instance of an operating system into different compartments for higher-level software, isolating different applications to an extent. For Linux, it's based on the open-source OpenVZ technology, but Virtuozzo also is available for Windows.

One popular application is among Web hosting firms that want to run multiple clients' Web sites from the same server. The Virtuozzo name gradually will be replaced with a Parallels-based name, likely Parallels Container, Beloussov said, and the management software products will follow suit.

Parallels, in contrast, uses lower-level partitioning software that lets an entirely separate operating system run as a guest atop another operating system. And the company is working on another product, to be called Parallels Server, "hypervisor" software that runs as a foundation to multiple operating systems.

Parallels Server is due to enter beta testing in the next month, with general availability in the spring, the company said. Meanwhile, the company began beta testing the first release candidate of Virtuozzo 4.0 on Monday; the final version is due in January.

Also coming next year will be the Parallels Workstation products for Linux and Windows, he said.

SWsoft's main competitor is market leader VMware, though open-source Xen and KVM projects also are on the list. More specifically, the Parallels line got some new competition this year when VMware introduced its own Windows-on-Mac product called Fusion.

The Fusion debut "decreased our growth," Beloussov said. "Definitely, VMware has taken some of the market. The price is officially the same (as Parallels), but they spend a lot of money on marketing. Their effective retail price is half our price."

SWsoft annual revenue has more than doubled in the last year, Beloussov said. The company has 900 people worldwide, a 50 percent increase over the last year.

(Credit: VMware)

VMware released version 1.1 of its Fusion virtualization software to run Windows on Intel-based Apple computers Monday--along with an offer for free versions of the software to some bloggers.

"I have convinced the powers at VMware central that there's big-time value in having a strong, open conversational relationship with the blogosphere," Peter Kazanjy, senior product marketing manager for VMware's Mac products, said in an e-mail sent to bloggers and seen by CNET News.com.

"I'm...offering an open NFR (not for resale) policy for people who are honest-to-goodness bloggers." There's "no obligation to blog about VMware Fusion, but if you do, please go ahead and send a link back to us to vmware.com/mac," he added. Unlike the free 30-evaluation version VMware also offers, the NFR version doesn't expire.

The offer was sent to fewer than 60 bloggers, a VMware representative said, and Kazanjy apparently didn't want to extend it to the entire blogosphere. "Feel free to let your blog friends know, but do me a favor and don't blog this offer," he said in the letter.

Fusion is playing catch-up with SWsoft's Parallels, which entered the market first. But VMware, which leads the overall virtualization market, is on the attack: the company also released a beta version of a tool to import Parallels virtual machines into VMware so that Windows installations can be moved to the other virtualization foundation.

According to VMware and Kazanjy, features in Fusion 1.1 include "robust" support for Mac OS X 10.5 "Leopard"; upgraded but still experimental support for DirectX 9.0 3D graphics; support for Boot Camp partitions as virtual machines; improvements to the "Unity" feature that lets Windows applications occupy a window unencumbered by menu bars and other Windows operating system elements; the ability to synchronize iPhone with Microsoft Outlook running in Windows; and performance improvements.

Fusion costs $80, but the upgrade is free.

VMware Server 2 beta, too
On Tuesday, VMware announced an open beta of VMware Server 2.0, its free server virtualization product known years ago as GSX Server. Unlike the premium ESX Server, VMware Server runs on a host operating system, Linux or Windows.

The new version should be generally available in 2008, VMware said.

New features include:

• Support for VMI, "paravirtualization" technology that lets Linux run much faster.

• Support for Windows Vista, Windows Server 2008 beta, Red Hat Enterprise Linux 5, Ubuntu 7.10 "Gutsy Gibbon", among others.

• A Web-based management interface.

• Support for up to 8GB of memory and two processors per virtual machine.

• Support for 64-bit guest operating systems, as long as the software is running on a 64-bit host.

Virtual Iron, a start-up trying to commercialize the open-source Xen virtualization software, has just gotten a new chief executive, and he wants to grab some of the attention lavished on rivals in the suddenly high-profile market.

The new CEO is Ed Walsh, who led Avamar Technologies, a company focusing on economizing storage by reducing duplicative data, which EMC acquired in 2004. John Thibault, who was named Virtual Iron's CEO in 2005, will remain executive chairman of the 73-employee Lowell, Mass.-based company, Virtual Iron plans to announce Monday.

Virtual Iron has been in the virtualization business for three years, getting started as Katana Technology with the idea that virtualization could let software be spread across multiple machines. That didn't work out, though, so the company shifted gears in 2006 to sell software that lets customers control software running on Xen.

Walsh knows he has his work cut out for him as he tries to give the company a higher profile. "Now's the time to put in a little sales and marketing and to hit the gas," he said.

To help that part of the business, Virtual Iron also has hired John McCarthy from EMC and McData to be senior vice president of sales.

Virtualization, which lets a single computer run multiple operating systems simultaneously, is a hot area, but the heat lies mostly with market leader and EMC subsidiary VMware, which had a successful initial public offering in August, following up last week with $65 million in net income on revenue that grew 90 percent from the year-earlier quarter to $358 million.

Also in August, Citrix Systems announced a deal to acquire Xen's primary backer, XenSource, a move it completed last week.

Meanwhile, Virtual Iron will have to reckon with other start-ups, including Qumranet, and Microsoft plans to make its serious virtualization debut in about a year.

Walsh seems to have Microsoft and XenSource more in his competitive crosshairs than VMware. He recognizes that XenSource has better recognition as a provider of Xen-based virtualization, but believes Virtual Iron's product is stronger.

"They have great marketing. The project has to catch up with their marketing," Walsh said. Virtual Iron, he said, "is the polar opposite." And Microsoft, he said, "isn't even to the table yet."

Walsh does have a strategy to work around VMware's dominance: partnerships with software companies on whose toes VMware is stepping. "They're racing so hard to grow this, they're going to gore the oxen of a lot of the ecosystem," he said.

VMware announced details of its forthcoming Virtual Infrastructure 3.5 on Monday, including an experimental feature to shut down servers if they're not necessary.

The feature, called Distributed Power Management, monitors how hard servers are working and moves virtual machines to new machines to let unneeded servers be shut down. When workload picks up again, the servers are powered up again, according to the publicly traded EMC subsidiary.

Virtual Infrastructure includes two main components. First is ESX Server, the underlying hypervisor that lets a single physical computer run multiple operating systems simultaneously in compartments called virtual machines. Second is VirtualCenter, which lets administrators monitor and manage those virtual machines.

Among other new features in VI 3.5, which is scheduled to be generally available later this year:

• The new ESX Server 3.5 gives Linux a boost with support for paravirtualization, which speeds some operations when the operating system is tailored to run on a virtual-machine foundation. It also can use a hardware feature called nested page tables that speeds memory accesses, modernizes storage and network abilities, and can run on servers with up to 128GB of memory.

• VMware Update Manager, which allows administrators to monitor which patches have been applied to operating systems and to apply those patches, regardless of whether a virtual machine is running or paused and saved to disk.

• Storage VMotion, a feature demonstrated at VMworld that lets a database's data store be moved from one storage system to another even as it's in use. The feature can be handy when taking a storage system down for repairs or upgrades, though the network resources required to move the data store to a new storage system can consume some of the capacity the database had when running ordinarily.

VMware sells VI in three editions: the basic Foundation, the mid-range Standard and the top-end Enterprise. For every two processors installed in a server (a processor being an x86 chip with up to four cores), Foundation costs $995, Standard costs $2,995 and Enterprise costs $5,750.

The Foundation product used to be called Starter, but the renamed version now removes previous limits on server processor count, memory utilization and shared storage.

Update: I corrected the CEO's name spelling.

Given how much time and money it sunk into KVM, the Linux-based, open-source virtualization project, it's not a surprise that that stealth-mode start-up Qumranet was working on virtualization. But until Monday, the company refused to say just exactly how.

At DemoFall 2007, Qumranet unveiled its strategy: software that makes it easier to run desktop PCs on central servers rather than on actual PCs. Others, notably market leader VMware, already have a start in that market, but Qumranet aims to make it possible by buying software from one company rather than hiring a systems integrator to stitch together a hodgepodge of components, said chief executive and co-founder Benny Schnaider.

Virtualization lets a single machine run multiple operating systems simultaneously. In the desktop virtualization arena, that's useful for replacing power-hungry desktops with energy-efficient servers that in principle also are easier to manage and back up.

Qumranet's SolidIce software runs on KVM virtual machines, which themselves run atop Linux. However, by virtue of features in newer Intel and Advanced Micro Devices processors, Windows can run unmodified on KVM.

Unsurprisingly, the company argues that it's cheaper than using full-fledged PCs. For basic desktop computing tasks, such as Word processing, SolidIce can squeeze about 20 instances of Windows onto a single dual-core, dual-processor server with 16GB of memory, said John-Marc Clark, vice president of marketing--and a former employee at remote desktop specialist Citrix Systems. Of course, somebody also has to pay for thin clients or PCs to tap into the remote servers.

Qumranet, founded in 2005, has funding from Sequoia Capital and Norwest Venture Partners. Of its 45 or so employees, about 5 employees are in the United States, with most research and development in Israel. The company is hiring sales and marketing now that its first product is available, Schnaider said.

The company also has technology it calls Spice (Simple Protocol for Independent Computing Environments) that's geared to transfer keystrokes, mouse clicks and audio to the server and to send video and audio back to the user. It's got partial support for USB devices today, Schnaider said. However, the company also supports Microsoft's RDP (Remote Desktop Protocol).

Clark sees a number of situations in which SolidIce would be useful. Many of them are the same as what we've heard for years from VMware and more recently SWsoft's Parallels group, but they're still worth noting for the uninitiated: providing a secure desktop to a temporary contractor; testing software or Web sites using various combinations of desktop software; avoiding painful transitions during PC upgrades; computer training rooms with a few dozen identical machines that need to be restored to a pristine state at the end of class; and running older software on incompatible new operating systems such as Windows Vista.