I've always maintained that if Microsoft really want to take the fight to Linux, all they would need to do would be drop some prices and fix up their confusing and at times insulting corporate licensing scheme. And it looks like this may happen, if the trend in the non-enterprise space is anything to go by.
Take the new Visual Studio 2005 Express Editions - all 'free for one year'. I'm still not sure what that means... whether it's 'download within the first year and it's free forever' or 'download and use it for free for one year from install date'. Either way, it's a good thing.
And the new 'virtual' licensing scheme. Buy 2003 R2 Enterprise, and run up to 4 virtual instances for no extra cost whatsoever. Microsoft have even graciously stipulated that it doesn't matter what virtual platform it's sitting on as well.
Speaking of their virtual platform, the new licensing for Virtual Server 2005 R2 is another example of taking the fight to the competition - $99 for the standard edition, which will run on up to 4 CPUs, and $199 which will run on an unlimited number of CPUs. I'm sure this will result in some more competitive pricing from EMC. It's not like they don't rip us off enough with their hardware already.
I have been a huge fan of VMWare for years, and while VirtualPC 2004 sucks teh pensi, I must say I'm tempted to run some comparisons at work between ESX Server and Virtual Server 2005 R2. I'm sure my company is like most - we are looking at using virtualisation to provide development / proof of concept environments and doing some hardware consolidation for some old boxes still running NT4. We are not even considering running high I/O production servers in a virtual environment. Obviously, in functional testing or proof of concept environment, performance is a non-issue. And with regards to migrating off old hardware, I'd be surprised if there was any noticable performance degradation when moving an NT4 application server off old P2/P3 based hardware with 1GB of RAM to sharing a dual Opteron box with 8GB of RAM with another 4-7 virtual machines. Regardless of what the virtual platform is - VMWare still recommend that you assign 800M of RAM and a dedicated NIC to the ESX service console. Windows Server 2003 running Virtual Server don't need any more resources than that.
I'll be looking very closely at both products in the next few weeks. If the performance differences justify the additional expense and infrastructure requirements to run ESX Server properly (ie full SAN backend, dedicated machine running Virtual Center, vmotion etc etc) then I'll happily never look at the Microsoft product again. But I have a hunch it won't turn out that way... I'll be sure to post my findings.