Just hours before VMware’s keenly awaited initial public offering, XenSource has reminded the market that there is more than one provider of enterprise class virtualisation software, and not all of them charge as much as the current market leader.

The announcement of XenEnterprise v4 marks a significant intensification of XenSource’s competition with VMware, closing the feature gap between the two companies’ flagship enterprise virtualisation infrastructure suites.

“This is our move up into VI3 territory” said Simon Crosby, XenSource’s chief technology officer. XenEnterprise v4, he said, is now “functionally equivalent” to VMware’s virtual infrastructure suite, but with the advantage of being written to run against the open source Xen hypervisor:”a [virtualisation] engine that is in every respect faster and more efficient than VMware’s [hypervisor] engine.”

Crosby promised that XenEnterprise will be significantly easier to deploy and manage than VMware’s VI3 suite. XenEnterprise “is like a [Toyota] Lexus” he said, “a car of the future that is full of advanced features ready to use today. VMware is more like a Rolls-Royce – sedate, expensive, and you need to hire somebody else to drive it for you.”

Certainly, in broad functional terms there I now little to separate XenEnterprise and VMware’s VI3. The addition within v4 of XenMotion and XenCenter answers VMware’s earlier support for live virtual machine migration using VMotion and most of the key features supported in VMware Virtual Machine Console.

XenSource still has a lot of ground to make up on its bigger rival, which claims to now have more than 20,000 live corporate customers for its enterprise virtualisation products. According to Crosby, XenSource is now growing its business at a rate of 125% “quarter-on-quarter”, but it is still has far fewer customer than VMware, whose much bigger business doubled revenue year-on-year in the last quarter.

In the circumstances functional parity is unlikely to be enough for XenSource to catch up with VMware. Instead, the company is positioning itself to be a cheaper source of virtualisation products for customers, and a better business partner than VMware for the fast growing virtualisation solutions reseller channel.

Pricing for XenEnterprise v4, which will be formally released on August 20^th, will start at $1,599 for an annual subscription per dual socket server, and $2,499 for a perpetual dual-socket server license. These prices are between 25% and 35% of the cost of equivalent VMware licenses, and may be even more competitive when see from the perspective of XenSource’s prospective channel partners.

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