"However, there are other providers still charging per server but the competitive landscape will knock that on the head," he said.

Interest in virtualization is at an all-time high in Australia with IT departments undertaking pilots and introducing plans to increase use of the technology in 2007.

Harapin has been "blown away" by the level of interest with the vendor forced to turn away registrations for a user conference being held this week.

The virtualization forums, which are being held in Sydney and Melbourne, have attracted more than 1,400 attendees.

It is the first time VMWare has ever held customer forums in Australia and Harapin said the company had to close registrations because demand was too high.