Microsoft has taken the wraps off their new pricing scheme for Virtual Server 2005 R2 Enterprise Edition, and the new price is a surprise coming out of Redmond: Free! The Standard Edition of the same product has been terminated, and moving forward there will only be the Enterprise Edition.

This move is being done due to pressure from Novell and Red Hat flavors of Linux which are both shipping with virtualization built in to the operating system. The Longhorn server class operating systems will ship with Windows hypervisor technology, which is a similar form of virtualization that will be based on the same virtual hard disk file format that Virtual Server uses, giving users an upgrade path.