Will Red Hat's RHEL 5 launch bolster virtualization?

Red Hat executives have spent a lot of time talking about virtualization and how Red Hat Enterprise Linux 5 will drive adoption.

Starting today we'll be seeing some hard results. Red Hat at noon ET (see Webcast) will introduce Red Hat Enterprise Linux (RHEL) 5. As News.com's Stephen Shankland reports Red Hat is looking to its latest release to widen its lead in the Linux market.

As Shankland reports:

RHEL 5's biggest new feature, hands down, is Xen virtualization. The promise of virtualization software, which lets a single machine run multiple operating systems in separate partitions called virtual machines, is that a single computer can replace several inefficiently used ones. In the longer term, virtualization also permits software to be moved--sometimes while running--from one computer to another, which opens the door for higher reliability and a fluidly responding computer room.

Accompanying the virtualization promise, though, are difficulties. Administrators need new management tools, software licensing becomes more complicated, and the underlying technology must be certified to work with a multitude of software and hardware options.

Red Hat will permit up to four virtual machines to run atop RHEL 5 Server, but it's adding a new product called RHEL Advanced Platform that supports unlimited virtual machines and includes the company's Global File System software.

Analysts note that expectations for RHEL 5 and its virtualization capabilities may be too high.

SunTrust Robinson Humphrey Terry Tillman said "we are somewhat concerned that expectations for RHEL 5 and its virtualization technologies may be ahead of where actual market adoption is."

Yet to be determined is how the virtualization pyrotechnics will affect RHEL 5 pricing.

Kirk Materne, an analyst at Bank of America, said in a research note:

"We believe the key takeaway will be getting some insight into pricing for RHEL 5, as we expect that RHT is likely to adjust per server pricing based on the new virtualization capabilities. In addition, we believe management may provide color around the upcoming Red Hat Exchange platform launch (RHX)."

Tillman noted that RHEL 5 won't have much pricing headroom. "Something that will be important to watch is the pricing of the virtualization component of RHEL.  Our checks indicate that pricing is likely to be more restrictive than that offered by Novell SuSE Linux," said Tillman.

In any case, RHEL 5 is expected to generate some buzz leading into Red Hat's fourth quarter results on March 29. However, RHEL 5's success will be determined over time.

Tillman said:

"The reality is that RHEL 5 will be important in terms of sustaining its Linux market leadership; however, hardware OEM and ISV certification and leverage of RHEL 5 will likely be borne out over a multi-quarter time frame, thus one should not expect any pop so to speak based solely on launch of RHEL 5."