Gordon Haff, an analyst at Nashua, N.H.-based Illuminata Inc., said it was a good move for XenSource, which is "still quite new technology that will take some time for it to prove itself out in the market."

King concurred: "For XenSource to survive, it has to support more than Linux."

Artale said XenSource will unveil some of its virtualization-related software plans later this summer, but he declined to go into specifics. While Microsoft already lets companies using Virtual Server 2005 on top of a Windows Server 2003-hosted server run multiple instances of Windows and Linux as guest operating systems, this tie-up will eventually let Longhorn deliver better performance and easier manageability, said Jeff Price, senior director of the Windows Server group.

"The core thing is that we will make Xen-enabled Linux run very well on Longhorn virtualization," Price said.

For now, there is only one Xen-enabled Linux available: Novell Inc.'s SUSE Linux 10 Server, which the company officially rolled out yesterday. Red Hat is expected to follow with a Xen-enabled update to its Red Hat Enterprise Linux by year's end.