Microsoft Enters Virtualization with Windows Server

SEATTLE, Feb 27 (Reuters) – Microsoft Corpreleased the latest version of its Windows operating system forpowerful servers on Wednesday, thrusting itself into thered-hot market for virtualization technology that allows onecomputer to act like many machines.

Windows Server 2008 marks Microsoft’s first major challengeagainst VMware Inc, the leader in virtualization, bybuilding the technology into its core operating system.

For the time being, Microsoft will ship Windows Server 2008with a test version of its "Hyper-V" technology, which adds anextra layer of software that sits between the operating systemand hardware, but it expects to add the full feature to thesoftware within six months.

Windows accounts for about two-thirds of shipments ofcomputer-server operating systems, but Microsoft is considereda laggard in virtualization to allow servers to run Linux orUnix operating systems alongside its own software.

Virtualization is one of the fastest-growing segments ofthe software industry because it disrupts the traditionalbusiness model that marries one machine to one piece ofsoftware like an operating system.

Before the Windows Server launch, VMware announced onTuesday an agreement to integrate its virtualization softwareinto computer servers from Dell Inc, Hewlett-PackardCo and International Business Machines Corp.

Along with Windows Server 2008, Microsoft will also takethe wraps off the upgrade to its SQL Server database software,due out in the third quarter, after delays pushed back itslaunch. The company will also highlight the latest version ofits developer software, Visual Studio 2008.

The upgrades are part of a new product cycle at Microsoft’sserver and tools division, which is the company’s third-largestbusiness, behind its mainstay Windows and Office units. Thedivision accounted for more than 20 percent of overall profitand revenue.

Windows Server 2008, the successor to Windows Server 2003,will also lead a broad shift to a more advanced 64-bit computerarchitecture. Microsoft will offer the new operating system inboth 32-bit and 64-bit versions.

A 64-bit operating system improves the performance ofcertain applications because it can address significantly morememory than a 32-bit version.

(Reporting by Daisuke Wakabayashi; Editing by Lisa Von Ahn)

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