While VMware is the market leader in desktop and server virtualization, open source Xen has enjoyed a similar position in the cloud service provider market.

Service providers growing beyond traditional hosting to cloud infrastructure as a service have typically chosen Xen as the basis for their offering. For instance, Amazon's EC2 is based on the Xen hypervisor, as is the Rackspace Cloud offering. Simon Crosby, CTO at Citrix Systems, the vendor behind Xen.org, explains why the Xen hypervisor has such traction: "Free is not enough for some cloud providers. Some companies need to be able to hack the software."

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Up until today, service providers had to take the open source Xen hypervisor and create their own cloud platform around it. That changed yesterday with the announcement of the Xen Cloud Platform, which goes beyond the hypervisor to deliver a platform for virtualizing storage, server, and network resources. Citrix's Crosby uses the analogy that this move takes Xen from producing a car engine to producing a car.

For customers, the most intriguing feature of the Xen Cloud Platform is the ability to move deployments across clouds created using the Xen Cloud Platform. The platform will adhere to the Distributed Management Task Force's Open Virtualization Format (OVF) for virtual machine images, a standard that VMware helped create. Going back to the analogy of starting with a car versus starting with an engine with the hopes of building a car, the Xen Cloud Platform makes it vastly easier for vendors to create a cloud offering. This will help drive down prices while giving customers the protection against vendor lock-in that they seek.

This recent Xen announcement seems like it could throw a wrench into VMware's plans to grow its footprint in the cloud service provider market. It should be noted that OpSource just announced a cloud offering built on the VMware hypervisor. But one has to wonder if OpSource would have made the same decision in 6 to 12 months when the Xen Cloud Platform has had time to mature. And when you consider service providers in emerging markets, the Xen Cloud Platform looks to be much more appealing than anything VMware has announced -- yet.

All this competition in the cloud market is great news for customers. Onward.

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p.s.: I should state: "The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions."