I recently have had the opportunity to use VMware's virtualization software on a Mac PowerBook Pro, running instances of Windows 7 and RedHat linux.  This setup is remarkably versatile.  You choose whatever computer hardware suits you, and then work in whatever OS suits your task.  

The significance of virtualization, as a development, cannot be overstated.  It is nothing short of a paradigm shift in the world of computing, and it's rapidly changing the efficiency level of hardware.  If you don't know anything about virtualization, as it pertains to servers, I can sum it up for you very quickly:

Get  more from less hardware.

It's really that, where before every server was single-use, either a web server or a database, now it is both, or more.  But without the problems that doing the same thing on one OS sometimes entails.  Greater efficiency because if one physical machine is only using say 75% of its resources, then a task can be moved to it easily enough.

Virtualization also makes the issue of cloning servers a remarkably trivial task.  Each instance of an operating system is ultimately just a file -- one very big file.  Maybe not literally just one file, but you can think of it this way.  

So once you get into virtualization you start thinking about software and hardware in a different way.  An operating system itself is 'just' software.  

Now that I have sold you on the idea that virtualization is an ever-growing trend, the question becomes what does VMware Inc have to do with all of this?  Are they the market leader?

The answer is very clearly: yes.  They are more than a market leader, they are the de facto standard.  Microsoft and Citrix are also in the same space, but Microsoft for instance started only in 2008.  (VMware started selling server-based virtualization software in 2001.)

At one point the idea was that Microsoft, as it has done with many types of softare, would come in and steal the show, all of a sudden VMware would be chopped liver.  It has not played out that way.  

This article gives some insight into the corporate spending climate with regards to virtualization: 

http://www.networkworld.com/news/2010/060710-tech-argument-citrix-vmware-microsoft.html

It's a world where everyone is asking what 'cloud computing' is and how do we get into it more?  And there is budget to buy because the perception (and truth) is you can save money with it.  Depending on which segment of the market you're looking at, Citrix and Microsoft may be serious competitors, but if we're talking brand perception, VMware still clearly dominates the space.  

Some more interesting stuff in this article here http://www.zdnet.com/blog/microsoft/is-vmware-the-real-motivator-behind-latest-microsoft-hp-deal/4972