Serguei Beloussov told Computer Business Review in February that the company would aim to eventually integrate the operating system-level and hardware-level virtualization technologies, but suggested the results were a long way from general availability.

In the long run what we intend to do is integrate them. There is not really one approach that is better, he said. At this point we intend to keep them separate and target them at different markets, but it has potential.

It now appears that the theory is much closer to becoming reality. We will have them together by the end of the year, he said, noting that the Parallels hardware virtualization approach will become a feature of Virtuozzo, and vice versa. In the management tools you will create a virtual environment, or a virtual machine, but it will be transparent, he said. We actually envision that operating system virtualization will work on top of hardware virtualization, and definitely alongside.

Virtuozzo is SWsoft’s traditional operating system-level virtualization product. It works by creating partitions, or virtual environments, on a single physical server and operating system instance. It enables users to run multiple applications on a single server, with each application acting as if it is running on its own dedicated operating system.

Parallels, which earlier this year it emerged SWsoft had acquired three years ago, offers a hardware virtualization platform. Like VMware and XenSource, Parallels virtualizes the hardware via a hypervisor layer that enables users to install multiple operating system instances and applications in separate virtual machines.

According to Beloussov, the downside of the Virtuozzo approach is that it requires all applications to use the same operating system, down to patch level, while the Parallels approach comes with a performance overhead as well as manageability and density issues.

Whenever you need different patch levels, hardware virtualization is better, whenever you don’t, operating system virtualization is better, he said, adding that while SWsoft had initially bet its growth on the latter, processor improvements by Intel and AMD meant that the former was overcoming some of its deficiencies.

We specifically chose operating system virtualization. For production workloads we believe it’s a better architecture, said Beloussov. The overheads of the hypervisor approach were very bad, but with hardware advances, it is possible to have hypervisor virtualization.

SWsoft came clean earlier this year that it is the owner of Parallels, a fast-growing desktop hardware virtualization specialist that will release its first server products in the fourth quarter. The integration of the two approaches via a common management platform makes sense for SWsoft given its stated intention to provide management capabilities for rival virtualization offerings from VMware, Microsoft, and XenSource.

Beloussov said SWsoft’s virtualization revenue is already roughly an equal split between the two products, with Virtuozzo the established enterprise offering and the Parallels Workstation and Desktop for Mac products targeting the high-volume consumer space.

He is expecting rapid adoption of the forthcoming Parallels Server software, at least among its existing customers. Where we will see quick adoption is among the Virtuozzo customer base, because it’s a new feature and it’s something they’ve wanted for a while, he said.

In May the privately held company announced that in the first quarter it enjoyed overall revenue growth of 140% and virtualization revenue growth in excess of 600%, evidence that the market is still in its early days.

While Beloussov admits that its rival VMware is the market-leader in terms of revenue and adoption, and that its partner Microsoft’s shadow looms large with its Viridian virtualization technology in development, he insists that there is still plenty of room for growth in a maturing market.

People always talk about virtualization being a commodity. Well, oil is a commodity but it is not free, he said. We do not see that in the future virtualization will become free because there is so much innovation.