XenSource has licensed Microsoft's Virtual Hard Disk (VHD) format for its upcoming Xen 3.0-based virtualisation server, called XenEnterprise.

As LinuxWorld Expo and Open Solutions World kick off in Boston, XenSource announced the deal with Microsoft and formally launched XenEnterprise, which is slated to begin shipping in the second half. XenSource is the commercial spinoff of the Xen open-source project.

Meanwhile, virtualisation market leader VMware stoked the fires by announcing Monday availability of its own virtual disk format specification at no cost.

For XenSource customers, supporting Microsoft's VHD format will enable XenEnterprise to run high-performance Windows guest workloads on Xen 3.0, according to XenSource. XenEnterprise will virtualise Windows, Linux and other operating systems in production environments and offer built-in physical-to-virtual tools, the company said.

The deal illustrates the increasing "co-opetition" and competition in the virtualisation software market.

Microsoft's Virtual Server and future Windows Server hypervisor will compete head-on against Xen 3.0, the open-source virtualisation hypervisor developed by the Xen open-source project.

Xen 3.0, for example, is being integrated into two upcoming Linux server operating environments: Novell's SUSE Linux Enterprise Linux 10 and Red Hat Enterprise Server 5.

The format war is on, although VMware also said Monday it's committed to supporting any other open virtual machine disk formats that are broadly adopted by customers.