The San Jose Mercury News reports Microsoft will unveil new virtualization software.

Microsoft will use Calista's software to speeds up the performance of applications running in a virtualized environment. No financial terms of the acquisition were released.

According to Microsoft, only 5 percent of the servers run virtualization software. Visit the Microsoft Press Pass for more information.

Todd Bishop's blog also has information in his post, Microsoft makes deal to buy virtualization company. "Microsoft was previously forced to delay its key server-virtualization technology, known as HyperV, from its upcoming Windows Server 2008 release, giving its virtualization rivals, such as VMware Inc., more time to establish themselves. The HyperV technology will now come out within six months of Windows Server 2008's release to market, Microsoft says."