We always said one of the dependencies for Longhorn server was Vista, said Bruce Lynn, raising the question of Longhorn’s delivery date given Vista’s availability. The big delay is virtualization. Virtualization is the hot technology. We’ve been very clear that virtualization belongs in the operating system and when you take a hypervisor approach we believe it has certain advantages.

In April 2005, Microsoft’s CEO, Steve Ballmer, announced that the company would introduce a virtualization hypervisor in the next version of Windows Server, which is codenamed Longhorn.

The hypervisor technology will be embedded within Windows and enable it to take direct advantage of processor-level virtualization technologies to improve the performance and efficiency of running virtual machines.

The approach being taken by Microsoft is similar to that taken by its open source rival and partner XenSource Inc in that it creates virtual environments at the operating system layer rather than the hardware virtualization model taken by incumbent VMware Inc, a division of EMC Corp.

The recent revelation that OS-virtualization player Parallels Inc is owned by hardware-virtualization player SWsoft Inc indicated that virtualization is a complex market, and it is for this reason that Microsoft is looking carefully at its own capabilities before it makes its move.

There are a lot of pieces and innovation is happen9ing on a daily basis with virtualization, said Lynn. We want to get this piece right, so we are being very aggressive about the degree of virtualization we deliver with Longhorn.

He said with such a fast pace of change in the market, the company is wary of missing its opportunity to make a big competitive splash because it is too busy ticking off a list of capabilities.

Now we are in trade-off mode, said Lynn. Do we put in that 18th or 19th capability? Windows is in a cricket game in virtualization with VMware, and the question is when we’re going to declare.

While it would be easy to assume that the desire to get virtualization right will mean that Microsoft will delay Longhorn beyond its scheduled late 2007 delivery, Lynn insisted that the company could also move earlier if it sees a specific opportunity to target VMware. This is so important to us that don’t discount that we might get this out sooner, he said, before confounding any attempt to second guess a delivery date: but it might even be later.

We don’t want to set any expectations in terms of time frame what it’s got in it, he added of Longhorn. But we are convinced that when we release Longhorn it will feature virtualization capabilities that are stunning.

While Microsoft and XenSource will both be offering hypervisor products once Longhorn is released, the two companies signed an interoperability deal in July 2006 that will eventually see Windows supporting Linux running on XenEnterprise and interoperability between Linux running on Xen on Windows, and Windows running on Microsoft’s own Windows hypervisor on the Longhorn.