In late 2009, Microsoft will ship Windows Server 2008 R2. As a follow-up to Windows Server 2008, Server 2008 R2 shares much, technologically, with its predecessor. However, unlike most R2 releases, Server 2008 R2 is not only a more compelling update than what was originally anticipated but also prompts some questions. Here's what you need to know about Windows Server 2008 R2 Beta.

Not Your Average R2
Microsoft instituted its R2 naming scheme, and the resulting major-minor release cadence for Windows Server, with Windows Server 2003 R2. That release was intended to set the stage for future R2 versions but many of its most impressive intended features were in fact delayed until Windows Server 2008. Ironically, with Server 2008 R2, Microsoft is packing in so many features that it risks alienating some customers.

The problem is that R2 releases aren't supposed to break the application and driver compatibility models set by their major release predecessors. And with Windows Server 2008 R2, Microsoft is attempting to do something it hasn't done since Windows 2000: Develop major releases of its Windows client and server products side by side. Doing so offers certain "better together" advantages. But it also breaks compatibility because the kernel and other low-level OS code must be aligned for both releases. The result is that Server 2008 R2 is, in many ways, a fairly major upgrade to Microsoft's server OS.

One of the missions of R2 releases, in general, is to supply up-to-the-minute support for next-generation technologies. So it stands to reason that those customers who would be interested in the many new Server 2008 R2 technologies are most likely OK with a compatibility break this time around. And many of them will likely be interested in R2's client stablemate, Windows 7, as well. Rightly so: Windows Server 2008 R2 is Windows 7 Server.

Notable New Features
Windows Server 2008 R2 brings numerous new features to the Windows Server product line. Some of the more notable include these:
Hyper-V 2.0 with Live Migration capabilities. Server 2008 R2 includes the second-generation version of Microsoft's Hyper-V virtualization platform, which brings the long-awaited Live Migration functionality. In Server 2008, it was possible to migrate virtual machines (VMs) from host to host with small amounts of downtime; now, as long as you have failover clustering, migration will be nearly instantaneous and will result in no downtime for users.
Remote Desktop Services (next-generation Terminal Services). At one time, Microsoft believed that most of the functionality in its Terminal Services (TS) technologies would be subsumed by its Hyper-V virtualization efforts, but the company now realizes that customers prefer a choice when it comes to virtualization. With Server 2008, the software giant began referring to TS as "presentation virtualization" to put it in line with its other virtualization solutions. In R2, these technologies are expanded and renamed Remote Desktop Services (RDS).

Some of the changes in RDS are simply branding. TS RemoteApp becomes RemoteApp. TS Gateway becomes Remote Desktop (RD) Gateway. TS Session Broker is now RD Connection Broker. TS Easy Print is RD Easy Print. And TS Web Access becomes Desktop Web Access. New to R2 is Desktop Connections, which integrates RemoteApp applications into the user's Start Menu for a truly integrated experience. This feature requires Windows 7 on the client. The low-level RD protocols have also been improved in R2 with such features as true multi-monitor support, multimedia redirection, audio input and recording, Aero Glass support, DirectX redirection, and language bar redirection.
Server Manager. Microsoft's all-in-one admin tool is being updated, finally. It will support remote server management.
Windows PowerShell 2.0. Although Server 2008 included the initial release of the PowerShell command-line and scripting environment, it was almost a science experiment: Administrators were expected to roll their own PowerShell administrative scripts or find them online. In R2, Windows Server begins its long march to a PowerShell–based, administrative-tools future. R2 includes PowerShell 2.0 as well as dozens of pre-made administrative cmdlets. Additionally, far more of the OS is now scriptable in PowerShell, including RDS. And PowerShell 2.0 lets you run scripts on multiple remote computers if necessary.
Active Directory Administrative Center. The first major PowerShell–based admin console to appear in Windows Server, Active Directory (AD) Administrative Center is a task-based UI built entirely on cmdlets, similar to the Microsoft Exchange 2007 admin console. It offers a three-pane view similar to Microsoft Management Console (MMC) with common AD administrative tasks on the left, tasks on the right, and the currently-selected tool in the middle. Microsoft says that customers can expect more Windows admin tools to "go PowerShell" in the future, modeled after the AD Administrative Center.
.NET and ASP .NET in Server Core. Server Core has proven to be one of the most well-regarded features in Server 2008, but customers asked for a few additional roles, one of which, Microsoft IIS Web Server, was only partially implemented in that release. For R2, a subset of the .NET Framework has been added to Server Core and with it comes support for the full IIS Web Server experience, including ASP .NET. Server Core can also run PowerShell scripts for the first time in R2.
Integrated IIS Extensions. With Server 2008, Microsoft supports the notion of extensions for IIS. But extensions are hard to find--they're available only on the Web--are optional, and many admins don't know they exist.
Massive scalability with better multi-core support. Server 2008 R2 will support up to 256 logical processor cores, a huge improvement over its predecessor's support for 64. Additionally, Hyper-V–based VMs can now address up to 32 logical processors per VM.

Server 2008 R2 Features That Require Windows 7
Server 2008 R2 also includes features that work with Windows 7 on the client. None of them are as fundamental and game-changing as were AD and Group Policy in Win2K, but the resulting streamlined, more easily administered environment could, I feel, cause many enterprises to pull the trigger on Windows 7 as well.
DirectAccess. This feature works similarly to HTTPS-based Microsoft Outlook access to Exchange and provides a simple way to let external users use your intranet without setting up an expensive and complex Virtual Private Network (VPN). From the user's perspective, network access is transparent and works as if the user is physically connected to the network. (R2 also includes a VPN Reconnect feature for those that do stick with VPN; this feature automatically reconnects users to disconnected VPNs.)
BranchCache. Yet another feature aimed at branch offices, BranchCache caches network traffic between the home office and the branch. If a user at the branch requests information that has already been accessed over the WAN, that user will receive the local, cached copy instead.
BitLocker to Go. The BitLocker Drive Encryption feature from Windows Vista and Sever 2008 provided a way to encrypt full disks, but these disks had to be directly connected to the system via conventional ATA/SATA connections. With R2, removable USB and eSATA storage is now supported via a new BitLocker To Go feature. This feature still requires specific Trusted Platform Module (TPM) hardware support.
Power Management. Because Server 2008 R2 and Windows 7 can natively monitor and autoconfigure power management at a far more granular level than their predecessors, this feature has been added as a server admin function. It's implemented by a collection of new Group Policy Objects (GPOs).
Remote Desktop App Connections. Discussed previously, this feature allows RDS–based applications to appear in the user's Start Menu and thus behave like native applications.

64-Bit Installation
Although Server 2008 R2's system requirements are similar to those for Server 2008, Microsoft previously announced that this release would be made available only in 64-bit editions. Because new server hardware is 64-bit these days, R2's 64-bit–only architecture won't be a problem for new installations. But it might cause problems with upgrades: Microsoft doesn't support in-place upgrades from 32-bit Windows to 64-bit. So organizations running 32-bit versions of Server 2008 will need to perform clean installations of R2. Those with 64-bit versions can upgrade in place. 

Timing and Availability
A beta version of Server 2008 R2 is now available, and you should use that feature-complete version of the product to evaluate when to begin rolling out this system. Microsoft says that Server 2008 R2 will ship roughly around the same time as Windows 7, which puts its Release to Manufacturing (RTM) date sometime in late 2009. Licensing will be identical to Windows 2003, and Software Assurance (SA) customers will get Server 2008 R2 as part of their ongoing subscriptions.

It's Okay to Break the R2 Rules
Because Server 2008 R2 breaks compatibility with its predecessor, it's not the simple proposition that was Windows 2003 R2. That said, it's hard to imagine the market not being excited about some of R2's new functionality, and those that opt to roll out both R2 and Windows 7 simultaneously--an unlikely scenario, I know--will see even more benefit. Server 2008 R2 breaks all the R2 rules. And that's OK with me. Whether it is for you will depend, of course, on your needs.