XenSource has announced a significant upgrade to the Xen open source virtualisation hypervisor, a product that in recent months has emerged as one of the key challengers to VMware.

Xen 3.1, released on Tuesday, is an update to Xen 3.0, which appeared in December 2005. Xen 3.0 was the first major open source virtualisation offering to compete with the likes of VMware, Scalent and SWsoft.

As open source software Xen is available for use by XenSource's own competitors, and some, such as Virtual Iron, have built significant commercial offerings on Xen. XenSource offers its own commercial offerings on top of Xen.

Virtualisation allows multiple instances of an operating system to run on a single machine, with cost and management benefits for system administrators. Xen's system is designed to offer high performance for large numbers of operating system instances, with the shortcoming that operating systems have to be modified to run with the Xen virtual machine motitor (called a hypervisor).

With version 3.0 Xen could take advantage of the Virtualisation Technology (VT) support built into recent versions of Intel and AMD chips which eliminates this limitation, allowing virtualisation of unmodified operating systems (such as Windows).

With Xen 3.1 XenSource has extended its effort to make Xen an industry standard with 64-bit features, live relocation and a new interface for developing management tools.

Version 3.1 now allows simultaneous virtualisation of both 32-bit and 64-bit paravirtualised Linux virtual machines, XenSource said.

That means companies could be running 32-bit Linux and Windows guest operating systems while simultaneously running 64-bit workloads such as Exchange, SQL Server 2007, Oracle, DB2 and SAP, the company said.

It said the 64-bit hypervisor is suited to memory-hungry and performance-sensitive database applications.

The new hypervisor also supports live relocation and dynamic memory control for hardware-assisted virtualisation on Intel and AMD chips, enabling dynamic resource scheduling and maintenance of Windows instances without the need to shut them down.

The new XenAPI supports development for third party Xen add-ons. It also presents a management API based on XML-RPC whic supports standardised virtualisation management.

The company said contributors to Xen 3.1 included AMD, Fujitsu, HP, IBM, Intel, the National Security Agency, Novell, Red Hat, SGI, Sun, Unisys and VA Linux (Japan), as well as XenSource itself.

After coming seemingly out of nowhere into the spotlight in late 2005, XenSource has hit some snags.

In Mid-2006 it was criticised for a deal with Microsoft designed to allow a para-virtualised Windows to inter-operate with XenSource's Xen, and to significantly add to Xen's appeal by making Windows Server virtualisation able to run open-source Xen-based guest operating systems.

At the time VMware pointed out that while the deal would optimise Microsoft code to run on the Xen hypervisor it does not allow Microsoft-XenSource developed code to be used by the open source community.

In December 2006 a relatively obscure virtualisation system called KVM (Kernel-based Virtual Machine) leapfrogged better-known rivals such as Xen into the Linux kernel when it was accepted for inclusion in kernel version 2.6.20.

KVM consists of a loadable kernel module and a user component, and is licensed under the GNU General Public License. Its development is backed by Qumranet, an Israel-based start-up with finance from Sequoia Capital and Norwest Venture Partners.

KVM was introduced only in October 2006, but its small size and simplicity have allowed it to make quick progress.