Among the more intriguing products that will be demonstrated at VMworld is InovaWave’s VirtualOctane, the new VMware ESX version of its DXtreme, which was only available for Microsoft platforms (e.g., VMware Virtual Server and Microsoft Virtual Server). Announced this week, VirtualOctane uses an adaptive I/O optimization engine to dramatically improve performance of virtualized applications. With it, InovaWave claims it will be able to help companies either:

• Increase (as much as double) the number of virtual machines (VMs) per ESX host;
• Improve the performance of existing VMs; or
• Enable the virtualization of transaction-heavy workloads.

It’s on that last point that InovaWave is particularly bullish. For its beta users, InovaWave has recruited shops with “significant investments in ESX” to test out the use of VirtualOctane against workloads such as ERP, databases and high-volume messaging applications – “applications that heretofore have not been virtualized,” said Chris Ostertag, InovaWave president and CEO.

If DXtreme user experiences are any indication, InovaWave might be on to something. But InovaWave won’t be giving away all this goodness for free. When VirtualOctane goes GA in October, Ostertag anticipates it will have a price tag of about $3,500 per socket, effectively doubling the cost of a VMware ESX license. You get what you pay for, I guess.