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An upgraded version of the XenSource Inc. virtualization hypervisor out Monday closes the features gap with market leader VMware Inc., but a wide market share gap between the two companies remains, an industry analyst says.

XenSource, whose product is based on the open source Xen distribution, is introducing XenEnterprise v4, adding features that may make it as appealing as VMware's hypervisor, said John Humphreys, senior analyst at IDC. VMware holds an 85 percent share of the market for virtualization software while XenSource and other contenders each hold shares in the low single digits.

A XenEnterprise v4 license lists for US$2,499, plus $500 per month for technical support, including free updates to subsequent versions of it, said John Bara, vice president of marketing for XenSource. The latest version of a comparable VMware offering is Virtual Infrastructure 3, which lists for $5,750 per license, for a two-socket server, plus $1,200 per month for support.

Companies that buy a hypervisor to virtualize their data centers consider performance, workload balancing and high availability more important than price, said Humphreys. But if XenSource can prove its hypervisor to be reliable and effective as well as less expensive, it could gain share on VMware.

"If you can raise the bar to [match] the market leader in terms of features, functions and capability, as well as stability, now you can make price something that customers can weigh," Humphreys said.

Among its other features, v4 includes XenResourcePools, which gives users the ability to provision server and storage resources as a group rather than one at a time. "That's a real differentiator for us that we can do almost a global provisioning of systems," said Bara.

XenEnterprise, a 64-bit hypervisor, can host up to eight virtual servers in one physical server. It also includes a new virtualization system management interface.

XenEnterprise v4 also adds XenMotion, which allows a software application to be moved from one server to another while still running. VMware has had a feature like that, called VMotion, available since May.

XenSource scored a coup by partnering with Symantec Corp. to include its Veritas Storage Foundation industry-standard storage management software in XenEnterprise v4 for data backup and recovery, said Chris Wolf, an analyst with the research firm Burton Group Inc.

"Most of your enterprise backup ISVs [independent software vendors] are only officially supporting VMware backup solutions. Symantec will offer official support for XenSource backup and recovery as part of their Net Backup platform. That is still the dominant backup product in the enterprise today, so that's very substantial," Wolf said.

VMware, a subsidiary of EMC Corp., is going public, selling a 10 percent stake in VMware in an initial public offering (IPO) of stock. The stock could go public as early as Tuesday. EMC last week raised the opening price range to $27 to $29 a share, from the $23 to $25 range it projected earlier, given the market interest in the IPO.