IBM Xen 3.0

Xen can convert a low-cost, Intel or AMD processor-based server into multiple virtual machines, each running a separate application. As freely available open source code, Xen is expected to play a major role in server consolidation over the next few years. A consolidated server running six or seven applications will achieve far higher utilization rates than one running a single application.

IBM support is a plus for Novell, which is getting Linux out the door with Xen ahead of its competitor, Red Hat. Both have announced support for Xen on their future Linux distributions. Novell on its Web site says it's putting "the final touches" on its Suse 10 distribution.

Red Hat plans to offer a distribution including Xen 3.0 late this year. IBM says the company will support Xen running on Red Hat Linux when Red Hat gets its distribution out containing Xen 3.0.

Xen was originally developed at Cambridge University in England, and its originators formed XenSource, a commercial company to provide technical support for its adoption. As a more mature Xen version 3.0 approached release last year, the virtualization market leader, VMware, made a bid to compete with the open source code by making VMware Server, a base-level, single-server virtualization product, available free. VMware is an independent business unit of EMC, and reported revenues of $157 million in its second quarter of 2006, a growth rate of 73%. If revenues continue at that pace for four quarters, VMware will become a $630 million-a-year software company. EMC has not previously broken out revenue figures for VMware.

IBM, HP and Sun Microsystems are lined up behind open source Xen as a way of bidding for part of the burgeoning virtualization software revenues, currently commanded by VMware.