DiDio thinks Microsoft's partnership with Citrix, owner of XenSource, is an important leg of Microsoft's strategy, even though some analysts expect Microsoft to play down this relationship when its own hypervisor hits the market.
The Microsoft-Citrix partnership involves Citrix virtualising Windows while Microsoft supports Citrix products. Microsoft's System Center Virtual Machine Manager can manage both Citrix XenServer and the Citrix Presentation Server. Citrix's desktop virtualisation product will support Hyper-V, and there will be interoperability between virtual servers running on the two companies' hypervisors, according to DiDio.
Microsoft also has partnerships with Novell and Sun, and says the next version of Virtual Machine Manager will manage VMware software.
"Microsoft's strategy is basically to surround VMware with all these partnerships," DiDio says.
Microsoft wants to differentiate itself by letting its hypervisor run on a broad range of servers that run Windows, supporting various models of Linux, and simplifying the installation process, says Zane Adam, the companys' senior director of virtualisation strategy.
"In talking to customers, we learned one thing: hypervisors are pretty much going to be anywhere, so management becomes the next challenge," Adam says.
But Microsoft's technology is lacking two features wanted by the most demanding customers, according to Jeffrey Gaggin, an enterprise software analyst for Avian Securities. One is live migration, which lets users move an application running on a virtual server from one physical device to another. With Microsoft, this migration takes 5 or 10 seconds while VMware can do it almost instantly, he says.
The second missing feature is "hot add", the ability to add memory to a server while it's running, Gaggin says.
"Beyond the hypervisor is the ability to manage all this stuff," he says. "That's where VMware really adds value. That ultimately will be a roadblock for Microsoft."
Still, "when Hyper-V launches, it could definitely have an impact on the VMware profit margin. Do people want to pay more for VMware's offering? I think that's always hard to tell."
Although VMware is the current leader in the Virtualisation market, a number of other companies are giving them a run for their money. Who will emerge victorious in the virtualisation war? We take a look at the competitors.
Some analysts believe Citrix has the second-best shot to make a dent in VMware's market share lead, but the praise is not universal. Citrix's key move was buying XenSource, run by the designers of the Xen hypervisor, last year for $500m (£250m).
Citrix's potential to disrupt VMware seems to depend heavily on whether Microsoft will turn out to be more of a competitor or a partner.
Bittman thinks Citrix acquired XenSource in the hopes that it could license the technology to Microsoft and prevent Microsoft from going forward with Hyper-V. Obviously, that didn't happen. Bittman thinks Microsoft, Sun and Oracle all pose bigger threats to VMware than Citrix does.