VMware's Raghu Raghuram, vice president of datacentre and desktop platforms, was in town recently, so we took the opportunity to grab some time with him and find out how he sees the year ahead. This is an edited version of the conversation.

Q: Where will we see product strategy heading in the next 12 months? A: You’ve seen some signs with the ESX 3.5 product line. It’s now an industry standard. We want to be sure that all workloads can work on it, also that being virtual is better than being physical because it's a better environment for systems management, and for keeping systems up and running.

Q: What new products will we see over the next 12 months? A: What we are introducing today is what gets deployed over the next 12-18 months, such as 10 gig networking, AMD’s virtualisation indexing, IO virtualisation built into cards, MPIV on storage cards, up to 32 cores. Other things that will happen in the ecosystem - we see a great wave of IO virtualisation, increasing cores, and from our own product line - I can’t talk about specifics but you’ll see us being concurrent with these technologies as they come out.

Q: What are customers telling you they want? A: We measure the rates of adoption in production. Last year it was 85 percent now it’s over 90 percent. We also ask to what extent people put applications into virtual machines, and that number stays steady in the mid-40s. The difference is that our customer base has doubled. We also ask what applications are going into VMs. Over 60 percent said enterprise applications such as ERP, SalesForce, and databases. High end applications such as transactional applications are not yet virtualised, especially since some are not on x86.

Because of today’s increased hardware performance, customers are not noticing any slight decrease in performance due to virtualisation. Also, people are saying that the flexibility they get far outweighs the virtualisation performance overhead. Also VMotion is being used by about 60 percent, HA and DRS by 42 percent, so it’s about more than just consolidation but it's gathering mainstream adoption. In the UK, the numbers are close to those of the US.

Q: Have we had the big wins with virtualisation - is the future just management? A: We're at the second innings of a nine-innings game. People say it’s a commodity which ignores the reality, which is that virtualisation incorporates the hardware - there’s lots of innovation left with rich virtualisation applications.

There’s lots of innovation left in making industry standard servers work with the reliability of the mainframe and with a value proposition at the cost of industry standard hardware. For example, how do you make this dead simple to do disaster recovery if you’re an SMB, make it the best environment to run your desktop, automate software environments from end to end? There’s a lot of room to go.

Q: Can you unpack that and project over the next three years? A: At VMworld, [VMware co-founder] Mendel [Rosenblum] showed continuous availability, version similar to fault tolerant hardware - that’s groundbreaking.

Q: What about Marathon who’ve been doing that for the last three or four years? A: They’ve been trying to but can they do it on such a universal scale such that it works for any application, any OS any hardware, making it invisible to the application and the OS? That’s one. Also, in the area of disaster recovery, in terms of long distance datacentres. In security, you have this layer under the OS under where the vulnerabilities, which is an area rife with potential.

Q: What about expanding the scope of virtualisation for SMBs - is [embedded] version 3i as far downmarket as you go? A: Version 3i is an important step but it’s an enabler. SMBs don’t want technology, they want what it does for them - better disaster recovery, availability - those are what we’ll be doing for small business, and 3i is the building block for that. Versions of what we do today in the general space, those are the kinds of things we’ll be doing for small businesses.

Q: How hard is it for VMware to address the needs of smaller business since they don’t know what they want? A: We already have a lot of smaller customers who use our technology but their concerns are the same as big ones - it’s about issues such as disaster recovery, availability.

Q: What about pricing? Won’t your prices have to fall when Microsoft [Windows Server with virtualisation] arrives? A: Not really. It’s about value for a price point. We now have a product at every price point from $500 upwards with the best hypervisor on the market. We’re delivering the best and most mature product at half the price of Microsoft - even when they come into the marketplace.

Q: [VMware co-founder] Diane Greene's on record as saying that Microsoft is the biggest threat. But can VMware keep on ignoring Sun and Novell, for example? A: Our investment dollars go where our customers tell us and we have R&D experiments such as continuous streaming that we demonstrated, but we’re also aware of what’s happening around us.

Q: AMD has spoken about the support it will be providing for code parallelisation - can you say what that means for VMware? A: Yes, we’ve always said that virtualisation is the killer application for taking advantage of the virtualisation support built into the processors, such as the support for threads at the processor level, such as hardware interfaces to have multiple virtual channels so applications can talk to them in parallel. To take advantage of all that without having to rewrite the application or OS - virtualisation is the only way to do it. So we are focused on that, working with AMD and Intel. It’s the next golden age of virtualisation.

Q: One of the things that people criticise VMware for has been its limited memory addressing in both host and guest. Some of this is fixed in version 3.5 but what took so long? A: It’s one thing to release something, another to make it work for over 20k customers and make it rock solid. Our stuff just works is what our customers say and that’s a hard thing to do. Take VMotion. From the time we first built it and the time we thought it was ready to go into a datacentre was two years, so that’s the level of testing that we do.

Also we’re very sensitive about when vendor technology hits the market. If you look at our support for the amount of physical memory in a system it was 64GB because systems with more were hard to come by. But now it’s happening so that’s why we're up to 128GB, soon to be 256GB.

Our hardware partners say it’ll be quite a while before we make the jump to the next level of memory, whatever that is. Same with 10gig networking which is just happening now or Infiniband, since outside HPC, Infiniband had not hit the market until now. It’s about waiting until a technology reaches mainstream consumption.

Q: Is there really no downside to virtualisation? A: We don’t see any. It means a different way of living your life.