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Microsoft Gets Real About the Virtual

Microsoft finally delivered the second betas of Vista, Office System 2007 and Longhorn Server at WinHEC, but perhaps the most important news made there was its acquisition of Softricity Inc. The deal, which adds application virtualization to the company's growing virtualization portfolio, has implications for a number of the company's strategic initiatives most notably Windows Live and Office Live

The acquisition not only brings an application virtualization engine into Microsoft's lineup but shores up the company's overall competitive position in the virtualization market against EMC Corp. with VMware, as well as against a number of top tier open source competitors including Red Hat Inc. using Xen.

"The Softricity deal is important in two or three different areas. One, it expands Microsoft's overall virtualization portfolio, which gives Microsoft a broader story than just saying it can compete just with Xen and VMware. It also now has a complete range of virtualization technologies instead of just a point solution," said Al Gillen, research director of Systems Software for IDC in Framingham, Mass.

The newly acquired technology is expected to work in concert with Microsoft's existing virtualization products and technologies namely Virtualization Server 2005 and its hypervisor technology, a thin layer of virtualization software to be embedded into its upcoming Longhorn Server operating system due early next year.

Microsoft has a couple of competitors in the application streaming market. Altiris, a competitor for Microsoft in the systems management space, recently entered the desktop application-streaming sector with its Software Virtualization Solution. Citrix Systems Inc. is also working on an application streaming solution based on its Tarpon technology.

The move could go a long way toward raising industry awareness of desktop streaming software, in the view of some analysts, along with helping Microsoft modernize its Web development strategy and play catch-up against a raft of fleet-footed Web 2.0-class competitors. It may also give Windows-based ISVs a smoother way to transition from the traditional client-server development approach of creating applications to a services-based one.

"Softricity can help third-party developers better deploy a Windows Live distribution model. For corporate developers with lots of customized apps for things like SQL Server, they can now start to think about converting from a client-server mentality over to a services-oriented one," said Dana Gardner, principal analyst with InterArbor Solutions Inc. in Gilford, N.H.

At the center of Softricity's portfolio is its SoftGrid platform. This technology makes it possible to turn Windows applications into a series of virtual services that can be managed centrally and that can be accessed by any Windows-based server or desktop system. Any application can be sent to desktop users as a virtualized image and does not have to interact with the operating system. This means application processes can run on local machines taking advantage of local resources with only a portion of the application being cached.

Initial plans call for Softricity's product set to be incorporated into Microsoft's Systems Management Software 2003 Release 2, according to Microsoft officials.

Great Expectations
While Softricity adds a number of competitive advantages for Microsoft, it may also force the company to significantly alter its existing licensing practices, something Redmond has been extremely reticent to do. Some analysts believe that if it doesn't amend those practices, perhaps toward a usage or metered-based licensing model, it will adversely affect at least the initial success of Windows Live and Office Live.

"This [Softricity acquisition] should disrupt [its] whole licensing model. If I'm going to stream an application down that I'll use only a few times and Microsoft wants me to buy a perpetual use rights license--that's unrealistic. [Microsoft] is going to have to figure that out," IDC's Gillen said.

Some developers and systems integrators also see a looming licensing problem for Microsoft given the essential nature of virtualization and how most would intend to use it. Many believe the company's existing licensing model will price its products out of the market as virtualization and streaming technologies become more widely adopted.

"[Microsoft] has some ridiculous rules in place for virtualization and partitioning. For instance, the OEM version of XP can only be installed on a single partition, which means you can't have two partitions on the same CPU. With virtualization, people could run three or four copies of XP or an application, so I can't see people with a $299 PC, paying $200 for every copy of the operating system they use. Give me a break," said James Barrett, systems lead at Thunder Dome Systems Inc.

In the wake of the Softricity deal, high-level Microsoft executives did not immediately address issues concerning licensing. However, one systems builder did ask a number of company officials about the prospect of changing licensing models, and was not encouraged by the initial reply.

"It appears that it [usage-based licensing model] is not something they are at all interested in. They told me point blank that it's too complicated to be dealt with effectively. Well, it is about to be an even more complicated issue for them if they don't deal with this," he said.

Window in Time
For the first time Microsoft announced the release of full-blown betas of an upcoming desktop operating system, Office suite and server-based operating system simultaneously (see our cover story on p. 28, "Beta Blowout" for more on the beta releases). The company made the decision to do so, in part, to prove how tightly coupled all three are in terms of security and productivity features including most notably search and document sharing, officials said.

Microsoft did not make its Vista code immediately available to the general public although it planned to do so through its Customer Review Program by the end of June. However, it did make its Longhorn and Office 2007 Beta 2 bits available to IT professionals and developers with TechNet subscriptions and to members of the Technology Adoption Program (TAP).

Only time will tell just how successful the simultaneous releases prove to be. While there appears to be no critical flaws among the early reports from beta testers on Vista and Office 2007, few believe the company will be able to discover all the problems, make the fixes, go through the Release Candidate stage, make those fixes, and deliver the finished products by November for the business versions and by the end of January 2007 for the consumer versions.

"I don't think they have a shot in hell of making those deadlines unless they have something up their sleeve they're not letting us see in terms of finished code. It's just a ton of code and enormous amount of feedback to collect and properly test over that period of time," said Barrett.

About the Author

Ed Scannell is the editor of Redmond magazine.

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