Server consolidation is the most obvious, long-standing use case, but virtualization is like a Swiss army knife. You can use it in a number of different situations.

We want to give users the full experience of what it means to have their applications run in a virtualized environment. It has to be very easy. They've got to get a high-quality experience.

Our experience over seven or eight years has been that when customers start using virtualization, they have a preliminary notion of what virtualization is. But once they get in and start using it, they see it's like a Swiss Army knife, and they can use it in many different ways.

They've been offering that over the last two years, and we haven't seen any distinct traction.

We expect both the rate of customer adoption and ecosystem building to accelerate even further in 2006. Concurrent with accelerated customer adoption, hardware vendors, OEMs, and software vendors are aggressively building products and solutions that enable and facilitate server virtualization.

Virtual appliances are entire pre-configured systems that include virtual hardware, operating system, and pre-installed software application. Virtual appliances save customers the time and effort to install and configure software.