VMware hopes to turn virtualization software into a mass-produced product that's as common in data centers as ketchup is on hamburgers, via a new "thin hypervisor" that major hardware vendors plan to bake into their servers.

The virtualization market leader announced the ESX Server 3i hypervisor on Monday. And Tuesday, VMware CEO Diane Greene told a standing-room-only crowd at the company's annual user conference here that embedding the new software directly into systems will enable hardware vendors to sell servers optimized for virtualization.

The opening general session of VMworld 2007 was a carefully orchestrated production that included presentations and affirmations of support for VMware's point of view from a range of companies, including IBM, Hewlett-Packard Co., Dell, Intel and Advanced Micro Devices.

Some VMware users who were at the conference said the release of ESX Server 3i, which consists of only 32MB of code, has implications for how they deploy virtual servers.

First, it's going to be easier to set up virtual systems with the server virtualization software embedded in hardware, said Joe Whorton, a software engineer who has worked with ESX Server at his employer, a financial services firm that he asked not be named. Now, systems running ESX Server should simply be able to be "stacked and racked" by systems administrators, according to Whorton.

John Gieringer, a sysadmin who also works at the financial services firm, said he thinks the embedded technology also will improve stability and perhaps security as well, "because every machine running it will be the same." Currently, different systems administrators tend to set up virtual servers in different ways, Gieringer noted.

But Thomas Andersson, infrastructure director at Stockholm-based steel maker SSAB Svenskt Stal, was circumspect about VMware's latest offering. "Until the products are really available, it's really hard for us to say anything about it," he said.

Hardware vendors include many features in their hardware, Andersson said, "but there are few of them that are actually used."

One of the first server makers that may embed ESX Light, as the software is being called informally, into systems is Dell, which said it plans to ship the hypervisor in products by the end of November.

Patrick Gelsinger, senior vice president and co-general manager of the digital enterprise group at Intel, was expansive about the future of data center virtualization, saying that he thinks virtualization technology ultimately will become a new operating system for the data center.

Gelsinger's point was echoed by Leedert van Doorn, a senior fellow at AMD who said that over time, everything will be virtualized -- "including the data center itself."

But challenges remain in areas such as security, according to Gelsinger. For instance, virtualization technology "becomes a new destination for attacks," he said.

IT managers also want quality-of-service metrics for virtualization so they can be certain they're meeting service-level agreements with end users, Gelsinger said. He added that Intel and other hardware vendors are working to develop standardized virtualization benchmarks.