Microsoft is taking aim at virtualisation specialist VMWare with the launch of a new software application that allows firms to convert machines running VMWare to Microsoft format.

Virtualisation, which allows companies to run multiple operating systems on a single machine, is a major growth market.

VMWare was valued at $11bn (£5.5bn) following its flotation last month following a successful year in which it doubled sales and generated revenues of $1bn (£500m).

Microsoft launched System Center Virtual Machine Manager 2007 this week in an attempt to limit VMWare’s lead in the market and its potential threat to Windows server software.

Windows accounts for about two-thirds of the market for computer-server operating systems, but it has been late in adopting virtualisation to allow servers to run Linux or Unix operating systems alongside its own software.