Atleast till 2010, as most of the analyst firms say.
Ultimately, VMware will retain its hold because, "As firms convert from tactical to strategic virtualization, only VMware will have the goods."
Gartner concurs that VMware will dominate for the remainder of the decade. It puts some caveats in place, however.
Thomas Bittman in his address, "Virtualization and the New Computing Architecture" at last month's IT Infrastructure, Operations & Management Summit in Lake Buena Vista, Fla. noted that although VMware will lead, "price (and EMC's dependence on VMware revenue) will be a major issue, unless VMware rapidly expands into higher levels of operations automation."
And as for desktop virtualization, I am betting on a typical heterogeneous virtualized desktop environment. There are enough vendors out there. This article mentions Provision Networks but there are a lot more folks on desktop virtualization than on Server Virtualization.
Read the rest.