During another presentation at BUILD, Brian Dewey, Microsoft group program manager for Hyper-V noted one way around this problem. Administrators could also save VMs on thumb drives or optical disks, and then ship them to the new location, where the VMs could then be incrementally updated with the latest changes.

Another possible application of the technology would be in permanently migrating systems from one data center to the next without incurring any downtime, Wolf said. Such work would be necessary in data center consolidation projects, for instance.

Beyond the practical uses, the new capability carries symbolic importance for the company as well, Wolf said. It shows Microsoft is knowledgeable enough with this emerging technology to stay on the frontier of its developments.

The technology "marks a point where Microsoft will ship the first real formidable challenger to VMware vSphere," Wolf said.

At BUILD, Microsoft touted a number of other new features to make Hyper-V and Windows Server more competitive with VMware as well. The company the ability to do live migration of the VM's virtual hard disk. Scalability was also touted: the new software will able to support up to 32 virtual processors for each VM, and each VM can now appropriate 512 GB of memory. A new virtual file system, VHDX, can be used to create virtual storage disks up to 16 TB in size.