A very frequently asked question internally. Hence I’m sure this must be as confusing, if not more so outside Microsoft. Many people seem incorrectly to think that Windows Server virtualization is the next version of Virtual Server 2005 R2. This is incorrect. Indeed, it could not be anything further from the truth. To set the record straight, the next version of Virtual Server 2005 R2 is Virtual Server 2005 R2 SP1. Beta 1 of SP1 was released recently and is available through connect.microsoft.com. So, the logical next question would be – “Is Windows Server Virtualization the next version of Virtual Server 2005 R2 SP1?”. Again, absolutely not. If (and no statement has been made) there were to be a “next version” of Virtual Server 2005 R2 SP1, it would likely be Virtual Server 2005 R2 SP2.
Windows Server Virtualization incorporates a completely new architecture. You cannot buy it (or download it for free in the case of Virtual Server 2005 R2) as a product and install it – it is part of the OS.
Windows Server virtualization has many capabilities which Virtual Server 2005 R2 will never have – much more to follow soon. Windows Server Virtualization is part of the platform, specifically Windows Server codename “Longhorn”. Further, it will only be available on 64-bit versions of the server operating system, and similarly only available if the physical hardware supports either IVT (Intel’s Hardware Assistance for Virtualization) or AMD-V (AMD’s Hardware Assistance for Virtualization).
Hopefully, this is clear enough