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Internet Information Services (IIS), formerly known as Internet Information Server, is a web server producted by Microsoft. IIS is used with Microsoft Windows OSs and is the Microsoft-centric competition to Apache, the most popular webserver used with Unix/Linux-based systems.
IIS was initially released for Windows NT and, along with ASP (Active-Server Pages), finally made a Windows-box a usable alternative for web-hosting. That being said, it was also noted for being completely wide-open out of the box and required significant configuration to be made secure.
This changed with later releases, and IIS is now generally considered by many to be a stable and usable product. As of 2011, the most current version is IIS 7, which includes pretty much all modern features you'd expect to see in a webserver, including tight integration to ASP.NET. Though, as with any Microsoft vs Linux debate, some would argue that Apache is the only way to go.