Hyper-V is gonna eat VMWare's lunch. 2008 Server is kicking ass and taking names, and is indeed a solid product from what I hear. MS's next iteration of server+virtualization will be the death knell for VMWare unless VMWare drastically reduces prices and comes up with remarkable innovative improvements in the next few years.

Hyper-V is a hail mary play, in case EMC/VMWare does something really stupid to screw up a good thing.

VMWare is an enterprise product. How many big enterprises are using Hyper-V? (A: Zero, officially anyway)

Alternative virtualization platforms are proliferating and get better all the time. Vmware has an early lead like Palm did and is correctly optimizing revenue from that lead but down the road ... where is palm today?

Agreed. Between Citrix (xen) and Redhat (kvm), as well as the related open source offerings, keep getting better.

I think the main area that VMWare still has a win, from people I know who use it, are management tools and the ability to prioritize/allocate/throttle IO on network block devices (SANs) per vm.