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Desktop virtualization buy could boost Windows Vista migrations

Microsoft will use Kidaro technology to create a new desktop virtualization product, increase its share of that market and create new Vista migration business for partners.

Solution providers could see a spike in Windows Vista migrations, thanks to Microsoft's acquisition of Kidaro -- a move that will also help Microsoft compete against VMware in the desktop virtualization market.

Microsoft acquired Kidaro, a Silicon Valley-based desktop virtualization vendor, last week. The company plans to use Kidaro's technology along with its own Microsoft Desktop Optimization Pack to create a new product called Microsoft Enterprise Desktop Virtualization.

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Most businesses and organizations have not yet migrated to Windows Vista because of software compatibility problems. With Kidaro technology, users can run incompatible applications on a virtual Windows XP desktop hosted on a Vista operating system. That will be the major selling point for Microsoft partners, said Michael Rose, a research analyst for IDC.

"It's a really cool way to deploy applications, particularly troubled applications that don't work with Vista," Rose said. "That's what Microsoft's focus is going to be, because Microsoft is an operating system company first."

Rand Morimoto, president of Microsoft partner Convergent Computing in Oakland, Calif., agreed that businesses and organizations with Vista-related software compatibility problems are the target customers in the desktop virtualization market. Kidaro technology can help customers who have completed Windows Vista migrations but now can't use certain applications, and it could spur customers who have not started Windows Vista migrations to do so.

"This adds a new layer to Microsoft, in providing this desktop virtualization stuff that seemed harder to do in the past," Morimoto said in an email.

Customers with high desktop uptime requirements will also be interested, because desktop virtualization is a cheaper, better way to make systems more stable and efficient, according to Dave Sobel, CEO of Microsoft partner Evolve Technologies in Fairfax, Va. To meet the same uptime guarantees in the past, it would take several spare desktops, imaging machines and "tons" of storage space -- a major obstacle for most customers, especially small and medium-sized businesses (SMBs), Sobel said.

"They can finally afford it," he said. "It's been so expensive."

Microsoft's Software Assurance program will be another selling point for the Kidaro technology. With VMware, for example, a customer must buy separate licenses for the virtual and physical instances of an application, whereas Microsoft allows up to four images with one application, Rose said.

The Kidaro acquisition -- along with the technology acquired from Calista Technologies in January and Softricity in 2006 -- will expand the burgeoning rivalry between Microsoft and VMware. Calista makes graphics technologies for virtualized environments, and the Softricity technology virtualizes applications.

VMware enjoys a significant lead in server virtualization, but that isn't the case in the desktop virtualization market, Rose said.

"They've been around for a while, but they haven't had a lot of traction," he said.

Server virtualization was the first big virtualization technology, but more attention is turning to the desktop virtualization market, Sobel said.

"I don't think anybody has a foothold in desktop [virtualization]," he said. "Desktop is the next step. There isn't a clear market leader."

The Kidaro technology will compete against the VMware Assured Computing Environment (ACE). Both run virtual operating systems directly from client machines, as opposed to other desktop virtualization technology that remotely hosts virtual operating systems.

"It puts Microsoft on a much better plane with VMware," Sobel said.

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