But NT could reliably run applications like an email server or a lightweight database as well as connecting end users to printers and files. So customers could install one server in a branch office or a server closet or a department LAN rather than buying one as a file server and another to serve applications. Microsoft ported all the applications it could to run on NT servers, recruited the hell out of ISVs to do the same, and tweaked most of its management and administration tools to be able to handle NetWare servers as well as NT.

Pretty soon people were buying app servers that could also do some networking, even if it took a little jury rigging to get the network to work. It was just easier and cheaper than buying two servers and learning largely incompatible operating systems.

Right now no one at Microsoft is admitting that Hyper-V or VMM is in any way inferior to VMware, though even committed Hyper-V users say VMware is better technology. They just don't feel they need that level of capability, and aren't willing to pay for it.

Bob Muglia says Microsoft is relying on customers to make the rational decision between Hyper-V and VMware. By 'rational' he means 'cheap,' though, not 'reflective of a deep cost/benefit analysis of management functions and IT administrative costs.'

Most technology purchases, no matter how sophisticated-looking the ROI calculations and cost justification, don't depend on rational analysis of cost versus savings in time and effort.

They depend on the upfront cost and the most obvious potential for savings. In this case that's the cost of the software vs. the amount saved from consolidating little servers into big ones, not a comparison of long-term administrative costs.

Microsoft is good at bang-for-the-buck technology pricing. That's how it built its lead in network operating systems and email and Web browsers and office suites. It's been the main argument Microsoft has used for its virtualization products for months ⬠far longer than the products themselves have been generally available.

It was the argument it relied on yesterday, less than a week before VMworld, the multi-day technical and user conference at which you can bet VMware will roll out not only new technology, but possibly a new strategy for dealing with 'rational' technology decisions about virtualization.

I expect Microsoft to keep talking all the way through it.