Microsoft to Buy Desktop Virtualization Company

Microsoft has bought Calista Technologies, which provides graphics technologies for next-generation desktop and presentation virtualization solutions, the company will announce at its Virtualization Deployment Summit in Bellevue, Wash., Jan.22.

Calista produces software that improves the end-user experience of three-dimensional and multimedia content for server-hosted virtualized desktops or applications delivered using Windows Terminal Services.

Microsoft has also extended its alliance with Citrix, which recently acquired XenSource, the open-source virtualization vendor.

The two companies will co-market a portfolio of new client computing offerings based on Windows Server 2008 and Windows Optimized Desktop solutions extended with Citrix’s XenDesktop and Presentation Server products and managed by System Center.

The combined offering is intended to give customers simple, flexible and low-cost client computing options, said Larry Orecklin, Microsoft’s general manager for server infrastructure.

The acquisition of Calista also fits into Microsoft’s strategy to provide a cohesive virtualization offering from the desktop to the data center, and to achieve that ubiquity as quickly as possible.

“Calista’s focus on network optimization is important to us, especially in the scenario where you are serving up client instances from a server over a network to an endpoint and where we need to be able to support a variety of different network connectivities,” Shanen Boettcher, Microsoft’s general manager for Windows product management, told eWEEK.

Extending Virtualization

Orecklin said it is too early to discuss exactly how Calista’s technology will find its way into Microsoft presentation and desktop virtualization products, but said Microsoft thinks of this as a platform technology and wants to ensure it makes virtualization as ubiquitous and available as possible, consistent with its overall strategy.

Orecklin did say that Microsoft intends to use Calista technologies to extend what it’s doing on the terminal services side to the VDI side; according to Orecklin, Hyper-V and System Center will operate at the data center level, while the tools from Calista combined with the Xen desktop will act as a connection broker and also provide some of the key pieces allowing customers to manage the client virtual machines.

While there might not always be T-1-type connectivity between all the instances, Calista’s technology will make that experience as rich as if it were working locally on the machine. According to Boettcher, the technology uses software-based compression, codecs and network optimization capabilities, meaning no additional hardware will be required.

Virtualization Price Break

Microsoft and Citrix will also collaborate to ensure that the Citrix XenDesktop connection broker works well with Windows Optimized Desktop solutions.

Microsoft expects to release Hyper-V in the third quarter of 2008.

Within three months of then, Microsoft will also release a tool to help customers migrate from the Xen hypervisor to Hyper-V. “It takes the VHD format and converts that to the Hyper-V format seamlessly,” said Orecklin.

Microsoft will also use the Jan. 22 virtualization event to announce that it will cut the annual subscription price of its Windows Vista Enterprise Centralized Desktop by more than two-thirds, to $23 per desktop from $78 previously for rich-client access devices covered by the Windows client Software Assurance program.

“This price reduction is in the spirit of making this more approachable and available, and we feel it is competitive at this level and strikes the right balance,” Boettcher said.

The licensing for Windows Vista Enterprise Centralized Desktop allows customers to run Windows in virtual machines on servers and access them from either PCs or thin clients.

Microsoft said that Calista, which has about 35 employees, will become a wholly owned Microsoft subsidiary, and will remain in California. Microsoft officials declined to disclose financial details of the deal.