As the leading operating system vendor, Microsoft has more to lose than any other vendor if end-user companies shift en masse to virtualized servers that run Microsoft products only as guests, rather than as the core operating system.

Microsoft recognized the threat early and began offering its own virtualization products after acquiring virtualization vendor Connectix in 2004 and re-issuing its products as Virtual Server 2005. As a Type II hypervisor (which runs on top of another operating system rather than the higher-performing Type I, which runs deep within the operating system,) Virtual Server has had trouble competing with VMware's products. Windows Server 2008 was to change that by competing with an optional hypervisor called Hyper-V that would be part of the core of the server OS. Hyper-V, which Microsoft announced would miss the Windows Server 2008 ship date only a day after announcing that date, is currently in beta testing and should ship sometime during the summer.

• Microsoft Virtual Server
• Windows Server 2008 with Hyper-V hypervisor