Oracle is trying to make its own move against VMware and Citrix/Xen in the virtualization software market, as the company announced at its recent Oracle OpenWorld tradeshow. Oracle's plans to create its own Xen-based hypervisor, dubbed Oracle VM, got a cool reception from industry analysts at that tradeshow.

By offering full support for Oracle products running on Oracle VM, and not VMware products, Oracle will try to chip away at VMware's enterprise market share, says Burton Group research analyst Chris Wolf. Oracle also will try to cook up pricing advantages for their customers, Wolf notes. (Oracle also supports x86 virtualization on Sun Solaris Containers.)

"Oracle has historically supported large enterprises using VMware on a case-by-case basis," Wolf notes. "Several Burton Group clients run Oracle inside VMware VMs, and have been doing so for nearly a year. Of course, public official support for VMware ESX VMs would be a step in the right direction," he says.

Pricing of enterprise software is becoming a confusing and sometimes contentious issue in an environment that's running on VMs. Should the software be licensed by number of CPUs, number of VMs, or number of end users?

Policies vary by vendor; customers negotiate individual licensing agreements. For instance, some CIOs have licensing agreements for software such as BEA's Web Logic application server that's based on a number of CPUs, not a number of VMs running on those CPUs; this means the CIO can run as many VMs as he likes on that set number of CPUs. A CIO with this arrangement is loathe to see it change if he's making good utilization of his virtualized environment.

SAP has stepped ahead of some other ISVs in sorting out the pricing and licensing issues that are popping up in virtualized environments, notes the Burton Group's Wolf. "SAP is actually a model vendor for enterprise ISVs to follow," says Wolf. "Their licensing is purely based on the number of end users. SAP understands that binding licensing to physical resources is counterproductive, since a major aspect of server virtualization is abstraction of underlying hardware resources," he says.