It seems that the FUD is starting in earnest as Microsoft revs up its attempts to unseat VMware in virtualisation software for volume servers.

CNet is reporting that VMware doubts analyst firm IDC's assessment of market share movements. IDC gave Microsoft a 23 per cent chunk of the virtualisation market for the combination of Virtual Server 2005 and the recently introduced Hyper-V. Microsoft crowed that the market is now wide open but the IDC numbers riled VMware, which noted that Hyper-V only just squeaked into the reckoning for the calendar quarter examined by IDC, and that Virtual Server is essentially freeware.

Leaving aside the vexed questions surrounding any analysis of market share, maybe the most significant point is that Microsoft and VMware are now engaged in a full-on conflict to earn your virtualisation budget. Virtualisation is likely to be one of the few survivors of the recessionary impact on IT spending. In fact, the needs to consolidate datacentres, save on electricity and better utilise existing server infrastructure together suggest that spending on virtualisation could even be accelerated by the prevailing macro-economic conditions.

As it has shown in previous shoot-outs with incumbents, Microsoft knows how to grab market share through a combination of attractive pricing, bundling and familiar tools. VMware, on the other hand, has a leadership position to protect. Look for this pair to do anything (legal) to get your money.