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 even for those huge customers, it's only a matter of time before Microsoft catches up. It usually does. So VMware has, tops, 18 months to continue innovating and to get its pricing to a more sustainable level for the long term and to communicate its direction to its large and -- until now, at least -- loyal user base.

Not to put too much of a point on the price issue, because if pricing were the most important factor, Xen or some other open-source software would have won the war years ago. Virtualization is a complex and far-ranging technology that, most of all, needs to work well and reliably with a shop's existing software -- that's far more important than the price tag. This is where I differ from my colleague, Steven J. Vaughan-Nichols, who contends that it's a done deal that open-source virtualization will seize the market and kill VMware. If VMware does fall, don't believe it will happen anytime soon; there's already too much of a huge installed base and switching virtualization horses is not a trivial exercise.

That said, I'm certainly not betting the company will continue to survive, no less lead the market. If it does either, it will have to act quickly, and it has a lot of work to do. Thus far, VMware's response to Hyper-V has been to say, 'But ours is better.' And even if that is true, the question becomes: So what? If I can implement and manage Hyper-V for a fraction of the price of VMware's