“The two-year wait is over.

Microsoft will formally launch its long-awaited Virtual Server 2005 early next week, sources said.

The virtualization software, which Microsoft acquired from the former Connectix in February 2003, runs on Windows Server 2003 only but supports Windows NT and Windows 2000 workloads. It will compete with EMC’s VMware and SW-Soft’s Virtuozzo, which allow for server consolidation and simplified management of applications.

Pricing has not yet been released but sources expect the Standard Edition to come in at around $500 and the Enterprise Version to cost roughly $1,000. Sources also said Microsoft is going to offer incentives to partners, but it was not yet clear what those incentives entailed. Both versions are expected to be available within a month. “

This is a good product in that it fills a need for more servers without more hardware. And, of course, it forms tha basis of legacy software support under Longhorn.