Microsoft's Virtualization Seven

My eWEEK colleague Peter Galli had the important details yesterday. There are seven related news items:

• Microsoft buys Calista Technologies
• Citrix and Microsoft extend their alliance to Windows Server 2008
• Hyper-V gets real release timeframe
• Windows Vista Enterprise Centralized Desktop subscription price reduces
• Vista Basic and Home Premium virtualization licensing loosens
• Microsoft supports Office application virtualization
• New virtualization Solution Accelerators are available

A single theme unites the virtualization announcements: The desktop. The big virtualization push has been in the rack room, spurred in part by server consolidation. But Microsoft is now making its big play for desktop virtualization.

What do these announcements mean? Here's my take on the first five:

Calista. I may sound like a scratched CD for repeating myself: Microsoft is on a major buying spree, and the company is clearly ready to spend whatever it takes to get ahead. Calista develops high-end graphics and 3-D virtualization technologies, which would extend virtualization's usefulness from the server to the desktop. Can you say "terminal services?"

I've got a "what if" scenario. In my testing of different virtual desktop packages, graphics is the one consistent area of diminishing gains. But that's obvious. What I wonder—and could Microsoft's core operating system team be thinking this way: New architecture, backward compatibility. Windows needs an Office 2007-like successor that is much better in every way. Microsoft can't up the ante, without first paying its debts, so to speak. Using virtualization, Microsoft could re-architect the operating system, while providing legacy application compatibility.

Directionally, there is something else. What happens if everything were virtualized? More than a decade ago, Sun introduced the write once, run anywhere concept for Java. Virtualization could be an interesting twist on the run everywhere concept and security model. The technologies are far apart, but the objectives shouldn't have to be. Already, Microsoft offers much of its enterprise beta software virtualized.

Citrix. The agreement is straightforward. Microsoft will offer as of yet unnamed solutions that combine Hyper-V and Citrix XenServer; the Citrix software eventually will integrate Hyper-V. Similarly, All Citrix virtualization products will support Hyper-V and Microsoft's System Center Virtualization Manager. In the future, System Center would be able to manage XenServer.

Microsoft rewards loyalty. Citrix has been loyal, even when it hurt. Both companies benefit from the deal, which creates a counterweight to VMware and other enterprise virtualization providers. But the endgame is bigger than virtualization, which relates to the Calista acquisition. Virtualizaton and thin-client computing are increasingly intertwined. The Citrix deal is as much about terminal services as are Calista technologies.

Hyper-V. Microsoft has committed to delivering its new Windows Server 2008 virtualization technology in the third quarter. It's about time that Microsoft gave firmer timeframe. Hyper-V is late to market, which creates small opening for VMware.

Let me say: For all the talk of VMware's doom, Microsoft has yet to deliver a final V1 product. Talk of VMware's demise is too reminiscent of the "bring out your dead" scene from "Monty Python and the Holy Grail." The so-called dead person pleads: "I'm not dead ... I'm getting better."

Licensing. Software Assurance subscribers will see the per-desktop cost of the Windows Vista Enterprise Centralized Desktop drop from about $78, to $23, annually. If Microsoft really wants to drive desktop virtualization, it needs to make the tools and pricing more approachable. Enterprises use the Vista tool for running Windows virtualized on PC or thin client.

Vista. Finally, Microsoft has relaxed virtualization licensing to include Windows Basic and Windows Vista Home Premium. Microsoft had licensed other Vista versions virtualized. The question to ask: Why now? I think it indirectly relates to the annual price reduction on Vista Enterprise Centralized Desktop. The cost reduction should make this essential tool available to more businesses—and many of them smaller organizations that might have used Basic and Premium on the sly.

Small influencer: Surging Mac sales. In October, NPD revealed that Mac users accounted for about 10 percent of Vista Business and Ultimate SKU US retail sales. Chris Swenson, NPD's director of software industry analysis, speculated that the number could be even higher if Mac users could legally run Basic or Premium virtualized.

The licensing scheme also makes Vista a cheaper option for Linux or Unix users that might need Windows, even if they wouldn't admit it.

With the retail sales surge winding down for Vista, Microsoft opens up virtualization licensing at an opportune time. Early on, people needing to virtualize Windows paid more; Microsoft maximized sales. At this stage, Microsoft gains by making lower-cost SKUs available without much retail revenue risk to Business or Ultimate.

Related Posts:

• Microsoft Gets Hyper About Virtualization, Microsoft Watch, Dec. 13, 2007
• Hyper-V: More Microsoft Gifting, Microsoft Watch, Dec. 13, 2007
• Windows Server 2008 RC1 Reaches the Masses, Microsoft Watch, Dec 5, 2007
• Exchange 2007 SP1 Readies for the 'Big Bang', Microsoft Watch, Nov. 29, 2007
• Think Visual, Microsoft Watch, Nov. 19, 2007
• Free Virtualization Software for Software Assurance Customers, Microsoft Watch, Nov. 12, 2007
• Eight Windows Servers for 2008, Microsoft Watch, Nov. 12, 2007
• Microsoft Makes the Hypercall, Microsoft Watch, Oct. 24, 2007
• New Windows Client and Server Beta, Microsoft Watch, Sept. 24, 2007
• Microsoft and Sun Sitting in a Tree ..., Microsoft Watch, Sept. 12, 2007
• Windows Server Delayed, Again, Microsoft Watch, Aug. 29, 2007
• It's Official: An Unofficial Delay, Microsoft Watch, July 10, 2007
• Got IIS 7.0?, Microsoft Watch, June 27, 2007
• It's a Virtual(ization) Mystery, Microsoft Watch, June 21, 2007
• Windows Server at the Core, Microsoft Watch, June 5, 2007
• 'Longhorn' Server Comes When?, Microsoft Watch, June 5, 2007
• 'Longhorn' Named Windows Server 2008, Microsoft Watch, May 15, 2007
• Microsoft's Big Bang Is When?, Microsoft Watch, April, 26, 2007
• Viridian Delay Foreshadows What About Windows 'Longhorn' Server?, Microsoft Watch, April 12, 2007
• Windows Server Takes the Lead, Microsoft Watch, Nov. 16, 2006