Quoting ComputerBusinessReview

Microsoft recently announced that it was cutting three features from its server virtualization technology due to be released when its new server operating system, Longhorn, is released to manufacturing in H2 2007. This announcement is significant as it indicates that Microsoft is struggling with its entry into the server virtualization market, which will come as welcome news to VMWare and Xen.

'Content VMWare is currently the clear leader in the server virtualization market with VMWare Infrastructure 3; its capabilities are at least 18 months to three years ahead of Microsoft (depending on which of the two vendors you speak to). The announcement that Microsoft is cutting three key features to meet its release schedule only adds to the view that Microsoft is not catching up with its rival in technology terms.

The three features that Microsoft is removing from its first release of Windows Server Virtualization (WSV), codenamed Viridian, are live migration, the ability for hot addition of resources, and reduced CPU support.

Live migration is the ability to move running virtual machines (VMs) between physical servers. This technology, which VMWare calls VMotion, is critical to any high-availability use of virtualization. The market in virtualization has moved beyond the driver of simple server consolidation, and organizations are now looking at value-added capabilities, such as high-availability and disaster recovery, as ways of extracting additional value from their infrastructure.

However, Microsoft does say that this technology is likely to be included in a Service Pack 1 release of the product, but this also raises questions about Microsoft's ability to produce the live migration capability on its architecture for WSV.

The knock-on effect of live migration not being in the first release of WSV is that Microsoft's System Center Virtual Machine Manager (SCVMM) product, due for release in the second half of 2007, will not be able to perform the live movement of VMs, which is a major reason why some customers would use SCVMM.

The second feature removed from the first release version of WSV is the ability to add storage, network, memory, or CPUs on-the-fly to running VMs This lack of this ability will restrict users from dynamically adjusting the resources to meet the current demands.

The third feature removed was to restrict the number of CPU cores. It has been pulled back to 16, which allows customers that have four quad-core servers to use WSV, but not those that have eight or more quad-core servers.

This announcement is important for two main reasons. Firstly, it signals that Microsoft is finding entering this server virtualization market more difficult than it thought, and it begins to sow the seeds of doubt in the minds of potential customers about Microsoft's ability to produce solutions that can compete with VMWare and Xen.

Secondly, it was the way in which Microsoft announced it that is important (it was announced on Mike Neil's weblog), but cuts of this significance should really be announced with an explanation of why.