Over the last 2 years Citrix has been catching up with VMWare in terms of features. VMWare has managed to stave off the XenServer threat by releasing some of its lower end products for free but it seems very unlikely they would be willing to match Citrix's latest move.
XenServer is Citrix's proprietary virtualization platform that is built on top of the open source Xen hypervisor. Previously a cut-down, single server product (XenServer Express) was available for free, but today's announcement means that features like centralized multi-server management, resource pools and live migration will also be free of charge (but not open source). See below for a feature comparison between the free offerings from each company. It is provided by Citrix so it should be taken with a grain of salt: