UPDATE 1-Microsoft starts selling rival to VMware programs

(Adds analyst comments)

BOSTON, June 26 (Reuters) - Microsoft Corp (MSFT.O: Quote, Profile, Research) said on Thursday it has started selling its new server virtualization software about six weeks ahead of schedule, putting pressure on market leader VMware Inc (VMW.N: Quote, Profile, Research).

Server virtualization software allows one machine to perform the work of multiple servers, letting companies save money on equipment, electricity, maintenance and other costs.

Customers of Microsoft, the world's biggest software maker, can start downloading the product, dubbed Hyper-V, from its website on Thursday, the company said. Microsoft had previously said it would make the product available in August.

Yankee Group analyst Laura DiDio said that Microsoft's entry into the virtualization market will give VMware's customers more bargaining power when they negotiate discounts with the software maker.

VMware's products have outstanding functionality but come at high prices, she said.

"I always tell companies to press very hard on pricing when negotiating with all software companies," DiDio said. "It's a buyer's market."

VMware controls the vast majority of the server virtualization software market. The company is 86 percent owned by EMC Corp (EMC.N: Quote, Profile, Research).

Other companies that compete with VMware include Citrix Systems Inc. (CTXS.O: Quote, Profile, Research), Oracle Corp (ORCL.O: Quote, Profile, Research), and two privately held companies - Virtual Iron and Parallels. (Reporting by Jim Finkle; Editing by Derek Caney)