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Microsoft Corp. this week is disclosing new details of its plans to take on VMware Inc and others in a hot field called virtualization.

Microsoft will announce an alliance with virtualization software company
Citrix Systems, disclose the acquisition of privately held Calista Technologies and lower the price of Windows Vista used on virtualized computers, Microsoft said in press release.

It also will permit, for the first time, consumer versions of Windows Vista to run in a virtualized environment, where computers or servers improve their effectiveness by running multiple operating systems and applications in "virtual" compartments on the same machine.

The company said its alliance with Citrix includes a co-marketing agreement. The company added that it would use Calista's software to speeds up the performance of applications running in a virtualized environment. No financial terms of the acquisition were released.

"Although virtualization has been around for more than four decades, the software industry is just beginning to understand the full implications of this important technology," writes Bob Muglia, senior vice president of Microsoft's server and tools division, in an email Microsoft is distributing to customers this week.

Microsoft plans to launch the next generation of its server operating system, Windows Server 2008, in February, but a key piece of software that enables virtualization, Hyper-V, won't be available until six months later. Once all the pieces fall into place, however, Microsoft says its line of server and desktop virtualization technology and the programs IT workers need to manage their mix of virtual and physical machines will push many more to adopt the trend.

Hyper-V is designed to provide a broad range of customers with familiar and cost-effective virtualization infrastructure software that can help reduce operating costs, increase hardware utilization, optimize infrastructure and improve server availability, Microsoft claims.

Virtualization, pioneered by International Business Machines Corp. (IBM) in the 1960s, has become popular for exploiting unused computing capacity on low-end server systems. The technology is also moving to desktop PCs such as Apple Inc.'s Macintosh, which can use virtualization software to run both Microsoft's Windows and the Macintosh operating system.

Virtualization specialist VMware, which is majority-owned by EMC Corp., completed a successful initial public offering last year. It now boasts a market capitalization of more than USD 31 billion.


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  Read More on Calista Acquisition