VMware may (emphasis on "may") be about to run into its first serious headwind. The company disappointed financial analysts earlier this week when it reported revenues slightly lower than expectations, punishing the stock

Some analysts now classify VMware as a "show-me" stock until the company next reports in April. But by then, Microsoft will have delivered its long-awaited Windows Server 2008, which contains a healthy scoop of virtualization built-in. And you can expect Redmond to mount one heck of a promotional campaign for the product over the course of this year, likely touting its virtualization capabilities as though they were the first to ever be delivered. Of course, this could actually help VMware, too, under the "all ships rising with the tide" rule.

But the other shark in the virtualization tank, Citrix/XenSource, will hardly be sitting on its hands over the next 12 months, either. The company looks like it could be on the verge of piecing together an interesting mix of Windows-based and open source-based (think XenSource) virtualization products and strategies that will have broad appeal over the course of the year. To boot, the company appears to be strengthening its technical relationship with Microsoft on the Windows side.

Ed goes on to link to a couple of additional articles that discuss the positioning of Citrix XenSource and Hyper-V in contrast to VMware's current situation:

http://redmondmag.com/news/article.asp?EditorialsID=9442
http://redmondmag.com/features/article.asp?EditorialsID=2367