As it puts the final touches on its Hyper-V hypervisor for Windows Server 2008, Microsoft is trying to convince the business masses that it has a sound desktop virtualization strategy, too.
That’s pretty important for a company whose fortune was built on – and whose future depends upon (in large part) – the desktop. And for a company that is behind VMware in the Virtual Desktop Infrastructure (VDI) space.
To that end, Microsoft this week announced it would offer technical support for Office running in virtual mode and cut the price of its Vista Enterprise Centralized Desktop by 50 percent. But that's only a stopgap measure since its enterprise centralized desktop is tied to Microsoft’s outgoing Virtual Server 2005 R2.
At the company's virtualization summit this week, Microsoft filled in the business masses on its long term strategy for VDI. First was its announced acquisition of San Jose, based Calista Technologies, which will provide graphics technologies for “next generation” desktop and presentation virtualization solutions using Microsoft's Hyper-V.
Calista’s technology enhances the user experience of 3-D and video content in virtualized desktop deployments and server-hosted virtualized desktops and applications using Windows Server Terminal Services. Over the long term, Microsoft said it plans to incorporate Calista technology into its Remote Desktop Protocol that wil be integrated with HyperV.
That deal -- combined with Microsoft's acquisition of Boston-based application virtualization provider Softricity in 2005, and Microsoft’s own Hyper-V virtualization work – gives the company a solid technological base on which to start its battle plan against VMware’s VDI.
At first glance, Microsoft’s deal with Calista (or any VDI solution for that matter) would appear to imperil Citrix, one of Microsoft’s closest ISV partners. Microsoft’s Bob Muglia said this week Citrix is not able to deliver the video support needed for a virtual desktop. Calista technology will, in Microsoft’s own words, enable remote workers to receive a “full-fidelity” Windows desktop experience. Hosting and delivering Windows desktops from a central server is Citrix’s traditional bread-and butter revenues. Isn't Microsoft's wholly own subsidiary Calista a catastrophe for Citrix?
Hardly. Microsoft’s vision for its desktop virtualization story is compelling but it will be some time before all the pieces are integrated together and with Microsoft's System Center.
In fact, It’s the deal announced today with Citrix that will help give Microsoft a fast way to play catch up in this early but fast growing market.
Citrix, which acquired XenSource late last year, and is preparing to ship its first version of XenDesktop at the end of the second quarter, has been appointed Microsoft’s first authorized VDI provider – at least in the interim, while Microsoft builds its own technology.
Microsoft and Citrix have once again teamed up, this time to give VMware a run for its money on the desktop front -- sooner rather than later. As Microsoft looks out to 2009 for delivering its first Calista extensions, Citrix has a solution just months away from release.
“Microsoft had no homegrown VDI solution. XenDesktop is Microsoft’s Go-To-Market for VDI,’"said John Bara, vice president of business operations and planning for the Virtualization and Management Division at Citrix. He said Microsoft told him it won’t productize Calista’s stuff until 2009. “Citrix has experience delivering secure high performance and reliable desktops so it’s our core competency.”
Per the terms announced on Monday, Microsoft and Citrix will co-market a portfolio of client scenarios based on Windows Server 2008, Windows Optimized Desktop offerings, Citrix XenDesktop and Citrix Presentation Server.
For example, Citrix XenDesktop connection broker will interoperate with Microsoft’s Windows Optimized Desktop solutions (available through Microsoft volume licensing) including Windows Vista Enterprise Centralized Desktop and Microsoft SoftGrid Application Virtualization.
Microsoft and XenSource announced a pact before the Citrix acquisition – a controversial one -- that would ensure that Xen-based virtual machines would run well on Hyper-V. Citrix and Microsoft will take that a step further, Bara said. As part of a project code named “Menju,” the two are developing another layer of interoperability that will enable full portability between VMs on XenServer and Microsoft’s Hyper-V.
Citrix’s acquisition of XenSource makes more sense every day.
Not only does it keep the Ft Lauderdale, Fl company afloat as the VMware-Microsoft war moves into full swing, but it also enables Microsoft to get a quick start in the VDI game without the kind of protest that would have erupted if it attempted to buy a rising open source star such as XenSource.
Citrix’s acquisition of XenSource no doubt gives Microsoft a more intimate view and knowledge of the open source company’s source code than it had pre-purchase.
Strategy: Microsoft is now in the stage of purchasing, assembling and integrating all the technological pieces it need to build a homegrown VDI solution capable of competing against VMware’s VDI. Citrix's purchase of XenSource wa a big step forward for Microsoft. In the interim, Microsoft has appointed Citrix and its XenDesktop solution to fill the gap.
Conclusion: Once again, Microsoft is behind the technological curve but has a close ISV ally to keep it relevant while it chisels away on its solution. And as observers pointed out, it’s still early in the VDI game. VMware has a growing number of customers deploying VDI solutions but Microsoft can easily catch up by offering VDI with all of the value added integration aspects customers are accustomed to -- tight integration with Windows server and Windows management infrastructure. But that is all contingent on market acceptance of Hyper-V. If Hyper-V fails, Microsoft might have to shell out more than $1 billion to buy Citrix.
