Lost amid all the client-side excitement about the Windows 7 Release Candidate (RC, see my review) is the fact that Windows 7's stable mate, Windows Server 2008 R2, is also on the same delivery schedule. So it should come as no surprise that Microsoft's Server team also completed its RC milestone for Server 2008 R2.

Looked at broadly, the Windows Server 2008 R2 RC is a chance for Microsoft to signal to its customers that the product is being finalized and has hit the home stretch. "This is an indication to customers that we're done," Microsoft group product manager Ward Ralston told me during a recent briefing. It's time to kick tires and evaluate it." Microsoft is also ready to start talking performance for the first time, and while the number of performance comparisons I was shown is small, more are on the way, and Microsoft has a compelling story to tell there.

What's new in the RC

Windows Server 2008 R2 isn't just about performance, and it certainly isn't a fine-tuning of the previous release, as its name implies. No, this is an ambitious and to my mind major Server release, one that dramatically increases the capabilities of the Windows Server line-up. As such, there are a slew of new features in Server 2008. (See my Windows Server 2008 R2 Preview for more information). And, go figure, the RC version of Windows Server 2008 R2 includes a number of new features and changes since the Beta, so I'd like to discuss some of those now. (Other new features will be revealed at TechEd next week, I'm told.)

File Classification Infrastructure

The RC version of Server 2008 R2 includes a single major new functional addition called File Classification Infrastructure (FCI). This feature helps businesses better manage the data that is stored on their servers by providing an infrastructure by which admins and IT pros can classify data using file labels and properties and then apply policy based on that classification. FCI is managed via the File System Resource Manager (FSRM) and is compatible with SharePoint. You can create rules that move or delete files on a schedule-based basis or any other criteria. It's all automatic and is extensible by third parties.

Hyper-V improvements

Those of you familiar with Hyper-V, Microsoft's hypervisor-based virtualization platform, know that the software giant shipped Windows Server 2008 with a pre-release version of the technology, and then delivered the final Hyper-V 1.0 version later that year. (The final Hyper-V 1.0 version is included with the Service Pack 2 release of Windows Server 2008, which will ship to customers in May.)

Hyper-V 2.0, previously announced for Windows Server 2008 R2, will include a long-awaited Live Migration feature. But there are some changes coming in the RC that weren't previously known.

First up is logical processor support: Hyper-V 2.0 can utilize up to 64 logical processors of the pool of to 256 that are available to the host Server 2008 R2 OS. These logical processors can be split as needed between any number of virtual machines that are running under Hyper-V. (By comparison, the original version of Server 2008 now supports 24 logical processors, up from 16 when it first shipped.)

Next, Microsoft has added a processor compatibility mode for Hyper-V 2.0 Live Migration. Previously, it was only possible to perform Live Migration between servers that were running the same processor family and version (i.e. if one server was running on Intel Core 2 Duo, the other also needed to be running on Intel Core 2 Duo). Now, it's possible to perform Live Migration between servers that are running on the same processor family, so you can do things like migrate from an Intel Pentium 4-based server to an Intel Core 2 Duo-based server. What's still not possible is cross-migrations between AMD- and Intel-based servers. The issue is technical, however, and Microsoft says it is working to change that in a future release.

A new Hyper-V feature called VM Chimney provides TCP offload support to virtual machines. That is, it allows you to map a VM to a physical network interface card (NIC) on the host computer, and bypass the virtual interface, improving performance. This feature is actually disabled by default because certain non-standard workloads actually experience a performance decrease. But in certain scenarios, like SQL backup and restore and Live Migration, VM Chimney will provide dramatic improvements, Microsoft says. (There are no limitations regarding the numbers of NICs you can use for VM offloading.)

Microsoft has also added Virtual Machine Queue (VMQ) functionality to R2 in the release candidate, but like VM Chimney, it's disabled by default. The reason this time is that only one vendor, Intel, currently makes VMQ-enabled hardware, and Microsoft didn't want a feature enabled that wasn't doing anything. If you do get a VMQ-enabled NIC (Qualcomm has also announced they're entering this market), you can enable it and see a performance bump.

Performance and scalability improvements

Windows Server 2008 R2 bumps up the number of logical processors supported by the OS from 64 to 256. But it isn't enough to just support processors arbitrarily, Bill Karagounis, the principal group program manager of the Windows Server business group, told me. "We have to make sure we do a great job of scaling too," he said. "We did work around NUMA enhancements, so we're well aware of the underlying hardware and topology of that hardware. This is a critical enhancement for scalability."

I was most interested to hear about Microsoft's first public revelations about the scaling improvements it sees with R2. According to the company, R2 experiences near-linear (1.7 times) scaling when moving from 64 processors to 128 on an OLTP SQL Server workload. And throughput on the FSCT file server workload capacity test improves 32 percent when comparing Windows Server 2008 against 2008 R2 on the same 16 core commodity server hardware.

(That latter improvement actually required Microsoft engineers to make changes to some code that had sat unchanged since the days of NT creator David Cutler. "That was his code," Karagounis said, "and let's just say he paid very close attention to the changes we made.")

Windows Server 2008 R2 provides power consumption reductions compared with the original version of Server 2008 and, more dramatically, with Server 2003. (I was shown data relating to the TPC-E online transaction processing benchmark.) Karagounis noted that some of these changes were also backported to Service Pack 2 for Windows Server 2008, so that many existing customers can take advantage of these improvements simply by updating to SP2.

R2 also offers some improvements around the size of the working memory footprint. Using its internal engineering memory metric (i.e. not Task Manager), Windows Server 2003 Enterprise occupies about 250 MB of RAM at idle. This compares to a bit over 150 MB for Windows Server 2008 and about 105 MB for R2. Server Core sees similar improvements: It's down from about 130 MB in Server 2008 to under 100 MB for R2.

Finally, WAN file copies see significant improvements, though you will need compatible systems (i.e. Windows Server 2008 R2 and/or Windows 7) on both ends of the transfers (hub and branch) to see them. Microsoft says that small and medium file uploads are up to 20 percent improved over Windows Server 2008/Vista, small and medium file downloads are improved up to 47 percent, and large file uploads are improved by up to 100 percent. Microsoft is also seeing up to 8 times improvements copying files across WANs with RoboCopy using its new multithreading capability.

Timing and availability

Microsoft will make the RC version of Windows Server 2008 R2 available to TechNet and MSDN customers on April 30, 2009, and it will deliver a public version of the RC in the weeks ahead. (Expect more news and information about Server 2008 R2 RC at TechEd, the week of May 11, 2009 as well.) As with Windows 7, the Server 2008 R2 RC will be the one and only release candidate, and the final major pre-release milestone.

Looking further ahead, Microsoft confirmed to me that both Windows 7 and Windows Server 2008 R2 would ship by the end of 2009, and not sometime in 2010 as has been widely reported. "As you suspect, Windows Server 2008 R2 will come out in the second half of this year," Ralston told me. "We'll have more details to discuss as time goes by, but you can expect the RTM and launch in the next couple of months."

Note, too, that Windows Server 2008 R2 is a 64-bit only release. Microsoft projects that the next Windows Server release will occur in 2012.

Final thoughts

Windows Server 2008 R2 is evolving into the stealth Server release of the decade, a seemingly minor update that, in fact, adds almost as much new functionality as its predecessor. There's a lot more to say about what's changed since the Beta release, but we'll have to wait until next week. Stay tuned: This story is about to get even better.