"Virtualization is the mainframe for the 21st century," said Stephen Herrod, VMware's CTO, at an event to launch the company's new vSphere 4 software, an update to Virtual Infrastructure 3, at its headquarters in Palo Alto, California.

VMware says the software will allow companies to transform their data centers into a "virtual compute cloud," where applications can be moved fluidly across compute, network and storage resources to wherever capacity is available. It's due for release by the end of the quarter.