Microsoft has released its first software for managing virtual machines on a network, and tweaked the licensing for its system-management products to take into account virtualisation.

System Center Virtual Machine Manager 2007, in the works for about a year and a half, has been released to manufacturing and will be available in October as part of Microsoft's System Server Management Center suite, the company said.

The new product is built on the same architecture as Data Protection Manager, Operations Manager and Configuration Manager. It is used for managing virtual machines in a datacentre that runs Microsoft Virtual Server 2005 R2, the current version of Microsoft's server virtualisation technology, said Patrick O'Rourke, group manager, Windows Infrastructure. "Customers now can use the same tools to manage both virtual and physical assets [on the network]," he said.

Microsoft also has changed the licensing model for its for its System Center Server Management Suite Enterprise, making it available for $860 per host server - which means the actual server that hosts any instances of virtual software - plus two years of Microsoft's Software Assurance plan. Previously, System Center was licensed per device being managed, O'Rourke said.

Microsoft has been developing and fine-tuning its virtualisation strategy over the past several years to keep up with virtualisation leader VMware and others, as well as to serve the needs of large customers who increasingly are using virtualisation in their datacentres. However, the company's strategy has predictably hit some road bumps.

Microsoft is developing virtualisation technology, code-named Viridian, that takes advantage of virtualisation-optimised processors from Intel and AMD, and will help keep the company up to speed with competitors.

However, though Viridian will be a component of Windows Server 2008, it won't be available until six months after the new OS is released. And since Microsoft recently pushed back the release of Windows Server 2008 to the first quarter of next year, Viridian's release is nearly a year away. The company also decided earlier this year to scrap some originally planned features of Viridian due to timing concerns.

In the meantime, customers can use a combination of Microsoft's stand-alone Virtual Server and its System Center products to install and manage both virtual and physical machines in the datacentre. Microsoft also is planning a mid-market version of Virtual Machine Manager, called Workgroup edition, for release in January. The software will cost $499 per host server.

Microsoft also plans to extend the capabilities of the next version of Virtual Machine Manager so that it not only supports Windows Server virtualisation technologies but also third-party virtualisation from VMware and XenSource, O'Rourke said. A beta of that software is expected to be available around the same time as Windows Server 2008, and Microsoft plans to update its roadmap then as well.