Microsoft is targeting system management as a way to differentiate itself from competitors in the virtualization market, the company said Tuesday.

Anticipating that the market for virtualization software, such as Microsoft's Hyper-V, eventually will be commoditized, the company sees management as the key revenue opportunity for competitors offering server virtualization, said Windows Enterprise and Management Division General Manager Larry Orecklin, speaking to reporters on Microsoft's campus Tuesday.

"Management becomes really the thing we believe is critical to ensuring customers can get full value from the virtualization opportunity," he said.

Orecklin said that for all the hype around virtualization, less than 10 percent of datacenters are virtualized today, according to research firm IDC. The reason for the slow adoption is that once companies began to virtualize their environments, they realized that the economics and logistics of managing them was quite difficult, he said.

Because of this, Microsoft aims to make easing management headaches the key to its virtualization strategy rather than to battle competitors purely on the technology, Orecklin said. "Rather than either go fight for that 10 percent, [we're] actually fighting for the 90 [percent]," he said.

Microsoft has been slow to offer built-in virtualization for its Windows Server platform, letting competitor VMware take a sizeable lead in the virtualization market. The company had intended to release Hyper-V as part of Windows Server 2008 in February, but delayed it until six months after the OS came out because Microsoft opted to remove some originally planned features.

"I would love to have had this product out sooner," Orecklin acknowledged Tuesday about Hyper-V, which is currently available in beta as a feature of Windows Server 2008 and will be available in July in full release.

Microsoft is so keen on making management the linchpin of its virtualization strategy that it plans to open up management for other virtualization platforms, such as VMware and XenSource, with its Virtual Machine Manager tool, which it released last September. Virtual Machine Manager is part of Microsoft's System Center set of datacenter management products.

The current release of Virtual Machine Manager supports only Virtual Server, Microsoft's stand-alone virtualization technology. Once it is released simultaneously with the full production release of Hyper-V in July, Virtual Machine Manager will support Hyper-V and VMware ESX virtualization.

The following version of Virtual Machine Manager, the details of which have not yet been discussed publicly, will extend management to XenSource's virtualization product, he said.

Microsoft plans to outline its virtualization strategy further at its Microsoft Management Summit next week, said Orecklin, who suggested Tuesday that a beta of Virtual Machine Manager with support for Hyper-V and VMware ESX also will be available at that time.