VMware's decision this week to give away betas of a new product, VMware Server, generated raised eyebrows but little annoyance. So what does it mean?

VMware Server replaces GSX Server and offers a wider feature set, including Virtual SMP, experimental support for Intel's VT and for 64-bit guest operating systems. The company has made it freely available for download from its Web site.

The company said its reasoning was that it wanted to seed the market with virtualisation products, to spread the good word and "to see people benefit from virtualisation technology", according to European technical marketing manager Richard Garsthagen.

Another motivation might be that VMware wants to put clear blue water between itself and the competition, as all the competitors' equivalent products aren't free -- apart from one.

Xensource's Xen is an open source virtualisation system. It supports and runs only on Linux at the moment, although its hypervisor technology is powerful and fast. It also ships with Red Hat Linux and SuSE, which means that it gets directly into the hands of those willing to try it.

Of the other, chargeable products, SWSoft's Virtuozzo uses technology similar to Xen's but can run on and support both Linux and Windows. Parallels' product, Parallels Workstation, is a direct analogue for VMware's Workstation, and a server version is planned for later this year. And Microsoft's Virtual PC and Virtual Server products are, for the moment, Windows-only, though this is set to change.

The most direct comparison with VMware Server is therefore with Xen, since both are free and can be easily experimented with. VMware's product consists of cut-down version of ESX Server -- "it can't do storage area network integration and redundancy, for example", said Garsthagen -- but is in other matters, fully functional.

That said, all have tiny market shares compared to VMware. Garsthagen professed not to be concerned about competition. He cited IBM's move to give away a virtual machine version of its DB2 database as a precedent for VMware's move.

Garsthagen didn't deny, though, that turning VMware Server into a giveaway would make it more attractive for hardware OEMs to bundle the system with their servers. He said: "The licence is very open and if an OEM wanted to redistribute they could. We haven't announced any yet but it's not unlikely that we will."

In terms of how it meshes with the rest of its portfolio, VMware said that GSX Server, for which the new product is the upgrade path, will be supported for two years after VMware Server becomes generally available in the second quarter of 2006. It leaves ESX Server -- the bare metal, hypervisor version -- at the top of the range and probably takes some of the pressure off the need to cut its price. If you need to run any OS other than Linux, then the freeware will do the job, although ESX Server offers better performance.

So is this a strategy for success? VMware sees this as a way of enlarging the market, especially at the small to medium-sized end of the enterprise market. And to have a big share of a bigger market is a better long-term bid than the alternative. As Illuminata analyst Gordon Haff says: "What VMware is doing here is similar to what many companies are doing. By lowering the bar to getting developers and users into the VMware universe, VMware increases the base of people that it can up-sell to."

From its lofty position as clear market leader, VMware can afford to be magnanimous but, unlike many companies in that position, has yet to generate animus as a result. And by catching its oppos on the hop in this way, VMware looks set to stay at the top for the moment.