Has EMC's VMware subsidiary lost its mojo? I ask because, all around, I see signs of a company in decline. From applications to desktops to servers, VMware looks less like the innovative contender that pioneered enterprise virtualization and more like a middle-aged has-been going through the motions.

Case in point: desktop virtualization. Time was when VMware owned this category. Its Workstation product defined it, while its ACE initiative gave it street cred in the datacenter. Company marketers would often wax poetic about the advantages of VDI (virtual desktop infrastructure) and how virtual appliances were the wave of software distribution's future.

[ InfoWorld's Paul Venezia argues that VDI's future is in doubt due to a perfect storm of trends working against it. | InfoWorld Test Center reviews: Citrix XenDesktop, Microsoft Hyper-V, and VMware VI3. ]

But then came complacency. After vanquishing Microsoft from the market, VMware left Workstation to languish with mostly incremental updates. In the meantime, Microsoft made an end-run around ACE, using its acquisition of Kidaro to drive the development of what would ultimately become MED-V. And as if this wasn't enough, there was the surprise debut of Virtual Windows XP Mode, a technology that would obviate the need for third-party legacy compatibility solutions (like the ones promoted by VMware) by baking a fully functional VM right into the OS.

VMware's response has been to cling to the high ground, retreating further into the ever-shrinking "technical superiority" niche currently occupied by VMotion and other virtualization esoterica. But even on this lofty perch, VMware isn't immune from direct assault. Sun's popular open source VM platform, VirtualBox, is now challenging VMware Workstation with support for more RAM and virtual CPUs per VM, as well as support for Direct 3D acceleration. And commercial competitor Parallels, long a thorn in VMware's side on the Macintosh platform, is going after the company's high-end technical users with its Workstation Extreme product.