An emerging company at the very center of this molten sector is XenSource, acquired by Citrix for $500 million in August. The company develops both server and desktop virtualization software for Window and Linux environments. At the core of the firm’s technology is its open source Xen hypervisor.

Only in mid October 2007 did the young XenSource achieve the 1000-customer mark, yet the company is already partnering with some heavyweights. HP will sell XenServer Enterprise Edition on its servers, and Dell will offer XenCenter as an option on its x86 PowerEdge boxes.

Most important – especially in terms of competing with market leader VMware – Xen architecture will be fully compatible with Viridian, the Microsoft hypervisor scheduled to debut with Windows Server 2008.

Helping guide XenSource in this period of rapid growth is Simon Crosby, the company’s CTO and one of virtualization’s most ardent evangelists. Crosby spoke to Datamation about the future of virtualization, the company’s partnership with Microsoft, and XenSource’s competition with VMware.

Q: The XenSource applications are based on open source. In terms of the virtualization market, what are the pluses or minuses of an open source approach?

Open source is an extremely valuable tool for innovation. One of the key things about the Xen code base is that it can be delivered to market by multiple vendors, and will be.

One of the biggest challenges that the hardware vendors have had is that vendors like Microsoft take five years to get new features to market for them. But of course we have support on Day One. So the day that the first Intel VT CPU ships, we have the support. The day the hardware virtualization [launches] we have the support. So we’ve become the industry’s first and best support for an enhanced hardware experience.

And at the same time, we’ve been very anxious to make sure that Xen as an engine was open sourced, but that multiple different vendors could have economic business models built around that. So we commoditize the “engine” – it’s the code base that everyone agrees should be commoditized – and then it has much broader applicability.

So, for example, Xen runs on [certain] PDAs, and Samsung is doing work with those as a product prototype. But it also runs on supercomputers from SGI. That way, we don’t have just one ‘car’ – there’s everything from Porches to Minis. So you don’t limit its applicability.

Q: What about the relationship between the Xen hypervisor and Microsoft’s Viridian? How will that work?

Microsoft implements the Viridian hypervisor as an add-in operating system component. The architecture of Viridian is very similar to Xen, but it is Microsoft-built – entirely.

And so the way to think about Viridian with Windows Server 2008 is pretty much like Red Hat does with Xen, or Novell does with Xen, or now Sun is doing with Xen with Solaris 10. So it’s a hypervisor included with the OS, which is basically the Xen architecture, but written by Microsoft. We have a partnership with Microsoft to make sure that Viridian interoperates with the world.

In fact, the partnership with Microsoft is extremely strong, and getting stronger. They’re important in the context of Citrix, and very important in the context of the integrated hypervisor, the embedded hypervisor, which will be shipped by Dell as of the beginning of next year.

Now, once an integrated hypervisor is part of a box, it doesn’t get installed. And you can imagine that that’s a very unnerving thing for an operating system vendor. And our intention is to make sure that it isn’t unnerving. So the plug-compatibility statement to Microsoft is that, basically, virtual machines created in that world will simply run in Viridian.

So the Microsoft partnership is actually very profound for us, and indeed we view Viridian as a valid implementation of the hypervisor, so all of our dynamic virtualization services components will run on top of Viridian.

The way to think about this is: we can sell the heck out of our product for the next year, until Virdian shows up. But when Viridian shows up, over the year or so after that it will have a footprint probably far greater than we could ever achieve on our own.

I’m interested in number of seats served with virtualization. And the hard economics say, use that as a valid implementation of a hypervisor; the hypervisor was always free – we made it free. Leverage that through value-added products that you deliver to the customer to deliver the value proposition of virtualization.

Q: But aren’t you also in competition with Microsoft?

Not at all – I don’t think we compete with them at all. It’s not about the hypervisor, it hasn’t been since we made Xen open source. That is, owning a hypervisor is not worth having – it’s just free. And we like to think we have the best one, right?

So the opportunity is to deliver value-added solutions to customers. And we’ll be delivering value-added solutions to customers generally, serving the Windows customer base, with value-added end-to-end solutions. We’re very happy with what Microsoft’s doing in Viridian. It’s a bit late, but that’s just Microsoft. [He chuckles.]

Read the rest of this interview at DataMation, here.