Oracle is chasing the hot virtualisation market by introducing an open source Xen-based hypervisor to compete against those from Novell, Red Hat and VMware, while undercutting them on cost.

The company claimed that Oracle VM would enable virtualisation on Oracle and non-Oracle software applications and on the Linux and Windows operating systems, as well as on x86- and x86-64-based servers -all at a cost lower than its competitors' prices.

The hypervisor is available as a free download. Technical support, including upgrades, on servers with one or two CPUs costs $499 per year, per system, while support for a system with unlimited CPUs costs $999 per year, per system.

By offering Oracle VM support at lower prices, Oracle again is pursuing a strategy it revealed last year when it offered less expensive support for Red Hat Enterprise Linux. By offering a Xen-based hypervisor, just as Red Hat and Novell do, Oracle could increase its competitive pressure.

Oracle VM provisions virtual servers, manages virtual environments and moves applications from one server to another while the program remains running. "With Oracle VM, users keep doing what they're doing, whether they are running a database or running an application, they don't see any change at all. Their job just moves from one machine to another," said Chuck Rozwat, executive vice president of product development for Oracle..

Companies like Oracle are introducing virtualisation hypervisors to take some control away from the operating system over software applications in a server, says Gordon Haff, principal analyst with research firm Illuminata.

But he added that Oracle, also wants to muscle in on the market share of the leading hypervisor vendor, VMware, in nearby Palo Alto. "Just as Oracle wants to minimise the role of the [operating system], so too does it want to minimise the role of the hypervisor," Haff wrote on his blog, Illuminata Perspectives. "From the vantage of Redwood Shores, VMware is getting altogether too much attention. The easiest way to minimise the impact of the virtualisation players? Offer Oracle's own hypervisor."

VMware says it welcomed Oracle's entry into the virtualisation space, but its prepared statement regards Oracle as more of a partner than a competitor. "We hope this will be the first of many steps that Oracle takes towards broad enablement of virtualisation,"said Parag Patel, vice president of alliances for VMware in a statement. He also said that the company sought stronger virtualisation support from Oracle, "including clear and consistent licensing guidelines for running Oracle software in virtualised environments."

The Patel statement also cast doubt on whether the virtualisation market needs another Xen-based hypervisor: "There are at least five variants of Xen available to customers today. Oracle's will be the sixth," it read.