Hyper-V will kill VMWare. That’s a bold statement, especially in a market where VMWare rules with greater than 85% share. However, as Steven J. Vaughn-Nichols from PCWorld put it, “there was a company that had 85% of the buggy-whip market… just before Henry Ford decided that Americans wanted a cheap, dependable car in any color they wanted so long as it was black.” Microsoft is in the Henry Ford seat currently. Sure VMWare has a more mature product and a huge headstart. So did Netscape in the browser market and IBM Lotus in the enterprise mail/collaboation market. Where are they now? Rusting junk heaps in a land Microsoft long since conquered.
As Steven mentions, VMWare makes all of its revenue from selling its Virtual Infrastructure suite and a small portion from professional services. The other vendors are giving it away. Microsoft’s even been known to include some level of professional services with a large product licensing purchase. Yes, that’s free as in beer.