Microsoft Thursday said delivery of the first public beta version of its Windows Server hypervisor virtualization technology would be delayed, but that the final product would still ship on time.

In addition, Microsoft said the final version of Virtual Server 2005 R2 Service Pack 1, which had been scheduled to ship by the end of March, now would ship by the end of June.

Virtualization has become a hotbed of network industry activity and a major area of focus for Microsoft, as it tries to match offerings already in the market from VMware, Virtual Iron, XenSource, Novell, Red Hat, SWSoft and others.

The technology is critical, as companies are looking at virtualization to consolidate server and storage resources and to cut data-center power costs. Microsoft also has made virtualization one of the pillars of its Dynamic Systems Initiative, a 10-year plan to develop a self-healing management platform for Windows.

On his blog Thursday, Mike Neil, general manager of Microsoft’s virtualization strategy, revealed that the first public beta of Windows Server Longhorn virtualization, which is code-named Viridian, would ship in the second half of 2007, not the first half as previously stated. Microsoft is planning to ship Beta 3 of Longhorn, the first public beta of the server, as early as next month.

Neil added, however, that Viridian would still ship in its final form 180 days after the shipment of Longhorn Server, which is slated to be released at the end of 2007.

One observer with knowledge of Microsoft’s final release timeline said the slip of the Viridian beta means that “[Final shipment] is looking to be more like day 179 than day 90.”