Forrester predicts Microsoft will not impact the virtualization market until 2010:

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"In the coming years, VMware will continue to dominate the market for x86 server virtualization, but it face new challenges from Microsoft's Windows Server 2008 and XenSource, according to a new report from Forrester Research.

The July 9 report finds that while Microsoft's soon-to-be-released server product and XenSource's XenEnterprise suite match some of the features found in VMware's products, it will take years for them to dislodge VMware from its spot as the premier provider of virtualization technology. "
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Read the full article at eweek.com.