VMware attacks Microsoft licence changes

VMware condemns Microsoft for blocking competition in the virtualization market

Virtualization leader VMware has published a white paper condemning what it calls Microsoft's moves to block competition in the virtualization market, the most public sign to date of the friction between the companies.

The paper, published Friday on VMware's website, takes issue with recent changes Microsoft has made to licensing terms for products such as published virtual machines, Windows XP and Vista and virtualization specifications.

The changes "restrict customers' flexibility and freedom to choose virtualization software by limiting who can run their software and how they can run it," VMware said. Microsoft is driving customers to use its own virtualization products by leveraging the dominance of key products such as Windows, Exchange, SQL Server and Active Directory, VMware said.

Demand for virtualization has exploded in recent months, with VMware's own revenues hitting US$232 million in the fourth quarter of last year, up 100 percent from the same quarter the previous year. The company, which holds about 80 percent of the market, also faces several new competitors, from the likes of Virtual Iron, SWSoft and XenSource.

Microsoft's way of competing, VMware argues, is to tilt the playing field in its direction by changing the way users are allowed to virtualize its products.

Microsoft is pushing its own desktop and server virtualization products, which it is now giving away for free and beginning to integrate into the operating system, its strategy with products such as media players and web browsers. Chief executive Steve Ballmer saying at an analyst conference earlier this month that the company would "compete very aggressively with VMware".

But the company has denied that the licence changes are part of that competitive strategy, instead saying they are merely designed to stop customers from getting more use out of products than they have paid for.

In the white paper, VMware outlined seven specific instances of anti-competitive behavior, including restriction of support for virtualized products, restrictions on running Microsoft VMs (virtual machines) on third-party virtualization software, restrictions on the mobility of VMs, prohibitions on desktop virtualization and secrecy around virtualization specifications.

"Microsoft does not have key virtual infrastructure capabilities (like VMotion), and they are making those either illegal or expensive for customers; Microsoft doesn't have virtual desktop offerings, so they are denying it to customers; and Microsoft is moving to control this new layer that sits on the hardware by forcing their specifications and APIs on the industry," VMware said.

The company said it isn't in customers' best interests to "force (them to use) an integrated virtual hardware/operating system/application stack for their operating system and applications".

The company is not filing any legal action against Microsoft, but in a Saturday New York Times report, co-founder Mendel Rosenblum compared Microsoft's current actions to its moves against Netscape, which led to the company's conviction on anti-trust charges.

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