Everybody here knows Virtual Server 2005 will be available as stand alone package, but some of you also knows Microsoft initial plans, when Connectix technology was acquired, were to embed virtualization technologies inside Windows.
This wasn’t possible immediately and required gradual integration, so Microsoft is starting to play the virtualization game.
First step could be Windows native support for further Virtual Server releases, after the imminent one. This support could arrive, a Gartner analyst said, in a Feature Pack format, which will be optional for customers and will only add highly wanted features to existing operating system.
If so, this will happen somewhere between 2003 and 2005, maybe at the same time of planned Windows XP Second Edition release.
The next step will probably be integrating Virtual Server, as a standard feature, in next generation OS: Longhorn. At that time, Microsoft only competitor’s life, VMware, could become much more harder than before…
If you want some more details, here you can read the article about Gartner prevision.