Xen just hasn't seen enough deployment out in the field yet, and getting it installed and set up is one really long and drawn out task.

Xen doesn't yet have any decent management tools of any description like VMware which is essential in an enterprise product (many would rather just buy VMware for that alone), and performing tasks like adding and removing hardware on a virtual machine is still pretty unstable. They also seem to have a bugs list that never seems to get smaller:

http://bugzilla.xensource.com/bugzilla/buglist.cgi?query_format=spe...

Not to mention that Xensource isn't the usual open source organisation people think of when they think of open source. They are a corporation that is, and has, burned up serious amounts of VC money (http://xensource.com/company/ - look at the VCs), taking on offices at $5,000 a month and making lots of truly ludicrous decisions like using the future Microsoft hypervisor.

Yer, yer. I know that Xensource is separate from the Xen community, but it's silly to think that things like this aren't having a detrimental effect on the software overall. Unfortunately, it seems that the venture capital fuelled soundbites about Xen being ready have been making their way to people who really should be able to see the forest for the trees:

http://www.novell.com/ctoblog/?p=19
(here he's suggesting a Novell exec made a kind of irresponsible statement -ed)