When I opened up my virtual mailbox Monday morning, I was buried under an avalanche of press releases from virtualization specialist VMware (NYSE:VMW). Then the annual VMworld conference kicked off, adding heaps of fresh PR atop the first pile. After I dug my way out, one thing was abundantly clear to me: VMware won't sit still and let the likes of Microsoft (NASDAQ:MSFT), Sun Microsystems (NASDAQ:JAVA), and Oracle (NASDAQ:ORCL) run circles around this incumbent market leader. This company hasn't exhausted its own research and inventions -- not by a long shot.

"Okay, tell us something we don't know."
The big deal that ties this news together is VMware's new Virtual Datacenter Operating System (VDC-OS). Think cloud computing on steroids, where an intrepid director of corporate IT can pool all hardware resources at his or her disposal into a giant blob of flexible computing power. Processor time, memory, network access, storage space, and other data-processing assets can then be assigned on demand to whatever application or project needs them the most -- automatically.

This is more than just a management suite for virtual machines, like Microsoft's Virtual Server or Sun's xVM product family. It's more like Amazon.com's (NASDAQ:AMZN) Elastic Computing Cloud or Google's (NASDAQ:GOOG) famously decentralized information infrastructure, scaled down to the size of a single data center and packaged for private use by any company with IT-management problems. On the flipside of that analogy, it's like stretching a traditional IBM (NYSE:IBM) "big iron" mainframe, with all of its fault tolerance and massive parallel processing acumen, to cover the entire data center.

Used correctly, a solution like this should lead to significantly more efficient use of the available hardware, alongside higher reliability -- when one processor or memory bank dies, its workload just gets shifted somewhere else. That means better efficiency, longer uptime, and big cost savings.

Building a secure market share
VMware is years ahead of the competition when it comes to advanced features like this virtual OS functionality. Sure, I think that both Microsoft and Oracle have it in them to produce a product like this -- eventually. But by then, I expect that VMware will have carved out a very comfortable slice of the potential market, because the early adopters will be the companies that most need better IT management.

These tough test cases will iron out any remaining wrinkles in the solution in short order, via the normal back-and-forth of production-level tech support. Get them settled on a workable solution to problems like complex data management and scattershot hardware purchasing, and they won't feel any need to fix what ain't broke anymore. And then they become perfect marketing tools: "Look how we helped Hyper-Mega-Mart (Ticker: HMM) and Worst-Case Scenarios, Inc. (Ticker: NOWAY)! Your data center will be a walk in the park!"

What this means for you
I really don't see how even Mr. Softy can hope to find a chink in armor plating like that, though I do appreciate Microsoft's efforts, since competition drives innovation in any business. But in the end, virtualization will be an afterthought in Microsoft's and Oracle's sprawling product portfolios, at most. The same goes for Sun, albeit on a smaller scale. Anybody else in this space looks like shark bait to me -- fishing for buyout offers from one of the big boys, rather than aiming for the top of the heap themselves.

Meanwhile, VMware will keep leading the way to bigger and better virtualization achievements. This is one of the days I mutter curses at our Foolish disclosure policy under my breath, because it's the only thing keeping me from buying VMware today.

Further Foolishness:

Microsoft is a Motley Fool Inside Value recommendation. VMware and Google are Motley Fool Rule Breakers picks. Amazon.com is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns a couple of Google shares but holds no other position in any of the companies discussed here, and holds no hard feelings for the cuts and bruises suffered in the information avalanche. You can check out Anders' holdings if you like, and Foolish disclosure is always a step ahead of the competition.