With the release Thursday of Hyper-V as a free download to Windows Server 2008 users, Microsoft is drastically undercutting the prices of x86 server virtualization pioneer VMware. But while Microsoft provides good enough capabilities for many use cases, there are still numerous reasons for an enterprise to choose VMware, analysts say.

"It's a question of capabilities," says Forrester analyst Christopher Voce. "VMware is a mature product in several areas. With regard to resilience, they still hold a lead over Microsoft feature-wise."

Analysts have pointed out that Microsoft's Hyper-V is missing two key features found in VMware. One is live migration, the ability to move an application running on a virtual server from one physical device to another. VMware can accomplish this task immediately with no downtime. It takes Microsoft a few seconds.

A second big feature where VMware has a leg up is "hot add," the ability to add memory to a virtual server while it's running.

Live migration in particular is important to large enterprises that might have hundreds or thousands of virtual servers, says Laura DiDio, a Yankee Group analyst. Live migration is available from Citrix's XenSource products, so there's another option for enterprises that can't tolerate any downtime, she says.

"Microsoft has quick migration, which is supposed to approximate it, but it's not really the same thing," she says. "Live migration does make life easier if you're a large firm. All those seconds and minutes do save you money."

Microsoft could upgrade its features in the future, but didn't want to delay the release of Hyper-V because of a few missing capabilities, Voce says.

"It was a question of getting the product out in the wild," he says.

Hyper-V's a good option if your goal is primarily to consolidate servers, and particularly if your administrators have been trained mostly on Microsoft technologies, Voce says.

Price is probably the biggest advantage Microsoft has over VMware and other virtualization vendors. Microsoft's Hyper-V is free to users with a Windows Server 2008 license, and a stand-alone version, due by year-end, will cost US$28.

VMware says it will offer better ROI than Hyper-V with technology that can deliver more virtual servers without a performance hit, resulting in a lower "cost per virtual machine."

Still, VMware is "being squeezed on price," DiDio says. "Hypervisors are becoming commoditized."

VMware hasn't said it will lower prices, but does offer VMware Server, a stripped-down, free version of its hypervisor. List prices range from US$495 for VMware ESXi to US$5,750 for VMware Infrastructure Enterprise.

"We're the only company with a price point for every kind of use of virtualization starting with just the hypervisor," VMware CEO Diane Greene says. "ESXi is available from our Web site for [US]$495. We have a free VMware Server that is very actively used, if you look at the discussion groups."

(Read our Q&A with Greene with Greene for more details)