VMware CEO Paul Maritz took another jab at IBM, sometimes called a pioneer of virtualization because of its use of the technology in its mainframes.

"Even IBM, which likes to claim to be the inventor of virtualization, didn't fully realize and anticipate what could have been done with this technology," Maritz said. "It's not about individual machines but about how groups of servers relate to each other."

Beyond the hype and the bluster, some analysts and customers at the event said there is some validity to VMware's claims. Thanks to enhancements in Intel's new Nehalem processors, as well as the improvements in vSphere, virtualized servers can now run much more demanding applications, said Chris Wolf, a senior analyst with Burton Group.