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Aimed at midsized and large organizations, Microsoft Virtual Server 2005 Enterprise Edition ($999 direct) is Redmond's latest version of the virtual PC technology it acquired from Connectix in 2003. With excellent administration capabilities and a no-fuss approach to setting up new virtual systems, this new release wins on several fronts as a tool that lets you do more with less hardware.

As far as Microsoft server products go, Virtual Server 2005 is a dream to install. It requires Windows Server 2003 (or Windows Small Business Server 2003), but you can also test it on Microsoft Windows XP. (We tried both operating systems with no trouble.) The only underlying OS prerequisite is that you must first install IIS 6.0.

Once that's done, the setup utility creates an underlying virtual master server in a matter of minutes. The master server can drive multiple virtual machines, each one a server with its own view of your hardware. These "guest" host operating systems are officially Windows Server 2003, Windows 2000 Server, and Windows NT 4.0 Server (SP4 to SP6). Microsoft doesn't prohibit you from hosting any x86 software application, however, as long as it doesn't require direct access to hardware or more than one CPU at a time.

Using the administration console in Virtual Server 2005 is a cinch. Unlike most Microsoft server products, you don't have to rely on an MMC snap-in to perform administration chores. Instead, the Virtual Server administrative console is Web-based and highly functional. Its main page presents a quick status view of all running servers, a thumbnail snapshot of what's running on each virtual machine, and a graph of CPU usage. We like that the Virtual Server events and alerts are on display here, too, beyond being logged in the standard Windows Event Viewer. We would have liked wizards for policy configuration, though, as many users need hand-holding for that task. Another serious drawback is extremely limited USB support in the VM and the lack of virtualization capabilities beyond the Microsoft software domain.

Installing a new operating system on each running virtual machine takes some effort, but if you do some planning, you need to do it only once. Virtual Server lets you clone servers quickly using disk images (called Virtual Hardware Disks, or VHDs). VHDs are easily the most immediately useful aspect of Virtual Server, as they allow admins to store and reuse operating system images flexibly. The approach is similar in spirit to products like Norton Ghost 9 or Acronis True Image 7, though those products aren't designed for virtual computers. Moreover, VHDs are available instantly and don't require physical copying. We used this feature to duplicate a Windows 2000 Server install in just a few seconds. Better yet, you can create differential disks and child-parent disks that work together to speed up server creation even more.

Administrators will also enjoy the solid control of server resources, including the ability to control CPU bandwidth, memory usage, and disk space for each virtual machine. (The Standard Edition of Virtual Server supports up to four CPUs. The Enterprise Edition, tested here, supports up to 32.)

Once your virtual servers are running, you observe what's happening on each virtual desktop by using the Virtual Machine Remote Control (VMRC). Like Remote Desktop, this tool lets you control a remote (or local) virtual server using your own keyboard and screen, in a window or even full-screen. Available via an ActiveX control, the VMRC can also be accessed through the standard Virtual Server Web admin console.

Of course, busy administrators usually do not have time to do everything by hand. An important feature in Virtual Server 2005 is its extensive COM-based API library for scripting. With over 40 objects and hundreds of methods to choose from, you can automate every aspect of VS 2005 in scripts or custom apps using most any COM-aware programming language.

Vendors like IBM have, one could argue, seen a surge in business for easily configurable virtual clusters on Linux. Microsoft's Virtual Server doesn't aim to be a general-purpose solution to virtual clusters, but the efficient 2005 version will get many organizations thinking about ways to consolidate existing server hardware, especially on legacy applications, and reducing their IT costs.

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Copyright ?? 2004 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in PC Magazine.