Microsoft's expectations are running high for the upcoming release of Windows Server 2008. Steve Ballmer, the company's CEO, will officially launch the server software at an event in Los Angeles on Wednesday, capping months of beta testing by customers around the world.

The launch is vitally important to Microsoft, which hopes sales of the updated server software will spur wider adoption of Windows Vista by corporate customers that have so far resisted the urge to upgrade from Windows XP.

[ Dive into the hands-on evaluations of the Windows Server 2008 family in the InfoWorld Test Center special report. ]

"We think with Vista SP1 and Windows Server 2008, the integrated benefits that customers see will really encourage them to start looking at deployments of Vista on the desktop as well," said Jagan Narendran, the director of Microsoft Asia-Pacific's Infrastructure Server Business.

Microsoft is counting on new features in Windows Server 2008 to attract interest from corporate IT managers. These features generally fall into one of four areas Microsoft focused on when developing Windows Server 2008: security, virtualization, Web productivity and business intelligence.

"In terms of virtualization, which I think is going to be key not only in mature markets but in emerging markets, currently about 5 percent of servers are virtualized, but we do think virtualization is getting more popular and will increase in reach," Narendran said.

Users that have tested beta versions of Windows Server 2008 said the software offers significant improvements in security and manageability over previous versions. This difference was particularly apparent for companies that still rely on older software, including Windows NT Server 4.0.

While many beta testers have already decided to upgrade their systems to Windows Server 2008, others are waiting to see the final version before making a decision.

"We are testing out one functionality of Windows Server 2008 and the portion that we are testing is the terminal services," said Hood Abu Bakar [CQ], CIO of Malaysia's MISC Berhad. "So far, based on our testing, users are quite comfortable with it. However, there is some feedback that users gave us, which we are sharing with Microsoft. We are hoping to see the latest version of Windows Server 2008 for this particular functionality before we decide to roll out."

Beyond Wednesday's launch, Microsoft is looking ahead to the introduction later this year of SQL Server 2008, which Microsoft hopes will appeal to customers building very high-end, mission-critical databases, a market where the company did not previously compete.

"On the day we launch Windows Server 2008, we'll make available the final community technical preview, which is the feature complete code set for the release candidate of SQL Server 2008. Between February 27 and the eventual product availability of SQL Server 2008 in Q3 of this year, customers will be able to take full advantage of everything that SQL has available and test it to their hearts' content," said Simon Piff, a regional solutions manager at Microsoft Asia-Pacific.

"Indeed, I'm sure we're likely to have some customers who decide to go live before the product's actually available in the market," he said.