Channel companies are also the ones that provide DR and other managed services mid-market companies desperately need, but can't afford to provide themselves. Not many, for example, can afford a second data center of any kind, let alone one that remains unused unless something horrible happens in the primary data center.

The services angle also moves Virtual Iron further from the price competition, which will become more intense when Microsoft ships Hyper-V for a reported $28 per instance and other companies offer their versions of the Xen hypervisor free or at extreme discounts.

"Free" doesn't mean "free" in virtualization, though, any more than it does in open source or any other serious area of IT. Add-on products for management, load balancing disaster recovery, application integration and security all cost extra, as do the technical support and consulting services most companies need to set up their own virtual-server farms.

Those are exactly the kinds of services Virtual Iron is hoping to provide, on financial terms that are acceptable to mid-sized customers.

Virtual Iron's approach also treats the more basic functions of virtualization—the ability to create and do basic management of virtual machines, for example—as a given.

Of course customers want virtualization; but what they really want is an affordable alternative for disaster recovery, extremely flexible server load balancing, the ability to save money by consolidating hardware and administration and the ability to deliver all those things without breaking the bank, reinventing the wheel or stretching IT so thin it can't support its own clichés, let alone the needs of its users.

Virtual Iron is, in other words, going to focus on the critical IT infrastructure business (steroided and performance-enhanced with virtualization) rather than staying in the virtualization business and offering infrastructure services as lagniappe.