Microsoft will catch up eventually. They have a much larger resource pool to draw from than VMware (read that as bank account). However it’s going to take some time for them to catch up as VMware has a solid product and they keep putting great new features into it that Microsoft doesn’t have an answer for.
Right now Microsoft has had to resort to Plan B, give the product away for free until we become the market leader. It’s a tried and true technique that they’ve used before and it works well.
However giving away the product will only work so well for so long unless they come up with some features that really set them apart from what VMware offers instead of just playing catchup with VMware.
Sooner or later MS will be on par if not ahead of VMWare. MS just seems to be far more tenacious as a company. But then, the same can be said of EMC. If EMC continues to hold on to VMWare then MS would take a bit longer to grind them down.
VMware has complete different market segment and innovations brought up by VMware are much ahead then the MS. From ESXi to vCenter to Vshield Products to Vcloud Director to Vmware Orchestrator, Request Manager to All Collaboration put VMware far ahead than MS as of now; Hopefully MS should catch up soon with innovations at various levels.