Microsoft has officially unveiled its new server virtualisation software which is intended to take market share away from rival VMware.

Hyper-V has been launched six weeks ahead of schedule, a move which took many by surprise.

Beta versions of the software have been available for download for some time, but Microsoft had said that it would launch the final code in August.

The software will be available free to Windows Server 2008 users or as a standalone download for $28.

This dramatically undercuts the prices charged by market leader VMware, and Microsoft is clearly betting that the low cost and full integration with Windows will be major selling points.

"Hyper-V has been designed as a Windows feature, which our customers know, so those with Windows Server certification will be familiar with it," said Bill Hilf, general manager of Windows Server marketing and platform strategy at Microsoft.

"The people who have all the in-house skills on Windows Server will know how to use it."

Microsoft claims that 1.5 million beta copies of Hyper-V have been downloaded, and the firm has installed the final software at 250 companies which agreed to take part in advanced testing.

Hyper-V is slightly more basic than VMware's current offering, as it lacks the ability to shift applications running in a virtualised environment on one server to another physical server with no downtime.

Microsoft's product also lacks the ability to add more memory to a running virtual server.

Nevertheless, Hyper-V is expected to be popular among smaller businesses which have been put off by the price of the VMware offering and do not need advanced features.

VMware claims that it has so far been unimpressed by Microsoft's efforts in the virtualisation field.

Raghu Raghuram, vice president of products and solutions at VMware, said earlier this year: "What we have been developing over the past seven years is what Microsoft is just starting to think about."