Partners Watch As Microsoft Rattles VMware's Cage

With industry speculation boiling over the imminent release to manufacturing of Windows Server 2008, Microsoft on Tuesday let loose with a barrage of announcements that cast light on how the software giant seeks to compete with (some might say extinguish) VMware and other virtualization vendors. In addition to allowing Windows Vista Home Basic and Windows Vista Home Premium to be used in virtual environments for the first time, Microsoft is deepening its partnership with Citrix to boost interoperability between Windows Server 2008 Hyper-V and Citrix XenServer, and will work with Citrix to bring to market a set of new desktop virtualization offerings.

Microsoft also announced its acquisition of Calista Technologies, a San Jose, Calif.-based startup that focuses on optimizing the performance of virtualized desktops and applications, a move that solution providers said fills an important gap in Microsoft's virtualization portfolio

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