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Microsoft buys virtualization player Kidaro

Software maker says it will add the company's technology to a subscription service known as the Microsoft Desktop Optimization Pack.

Updated at 10:30 a.m. PDT with comments and further details from Microsoft.

In its latest move into virtualization, Microsoft said on Wednesday that it has bought Kidaro, a company that helps businesses manage their collection of virtual machines.

Microsoft said the technology will make it easier for businesses to manage application compatibility challenges, ultimately spurring faster Vista adoption as well as broadening the use of virtual machines within corporations.

"The challenge we have with Virtual PC today is it doesn't have enterprise-level management and deployment with it and the user experience could be improved," said Gavriella Schuster, a senior director in Microsoft's Windows unit. Schuster said that Kidaro's technology helps on both scores. In addition to tools for setting up and managing virtual machines, Kidaro has technology that makes virtual machines less jarring for users, making them appear to be part of the standard desktop. (Parallels has a similar feature in its Windows-on-Mac virtualization product)

Schuster declined to give financial details on the deal for the privately held firm, which has 35 employees, with its development based in Israel. Schuster said Kidaro's three founders are remaining with Microsoft and will continue to lead the product's development in Israel.

Kidaro's technology will be added to a future version of the company's awkwardly named Microsoft Desktop Optimization Pack. The collection of tools is sold as an add-on to Microsoft's Software Assurance program for volume license customers. Other things in the collection include an application virtualization technology known as SoftGrid and asset management tools that stem from Microsoft's AssetMetrix acquisition.

Microsoft announced the Desktop Optimization Pack in October 2006 as an add-on to its subscription Software Assurance program.

Schuster said that Microsoft won't know exactly how long it will take to add in Kidaro's product to MDOP until it has a look at the code. "We hope that it's certainly less than a year," she said, adding that Microsoft aims to have a more concrete time frame by its Management Summit next month.

While perhaps not a mainstream way for businesses to move to Vista, Schuster said Microsoft thinks some companies will find it more palatable with Kidaro's tools to run older, Vista incompatible applications via a Windows XP virtual machine.

"We do see that as a pretty significant option for a lot of our customers," she said.