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Microsoft, Citrix ink thin-client deal

Microsoft will license Citrix's multiuser technology and the companies will cooperate on the development of Windows NT Server 4.0 and 5.0 generation servers.

Microsoft (MSFT) announced a licensing and development agreement with Citrix Systems (CTXS) to provide Windows-based terminal support for the Microsoft Windows NT Server operating system.

The deal, which guarantees Citrix $75 million and includes another $100 million in fees tied to shipments, could not come at a better time for the company whose stock lost almost 60 percent of its value in late February after Microsoft announced intentions to build a similar product to Citrix's WinFrame software.

The new multiuser capabilities--which allow software programs to be run from the server and support the concept of Windows terminals--will be included in Windows NT Server 4.0, 5.0, and beyond, according to officials from both companies.

"It's now feasible to support very low-cost devices attached to a Windows NT server," said Paul Maritz, Microsoft's group vice president of platforms and applications. "This is a compliment to the work that we do."

The Microsoft Windows platform now boasts options for traditional PCs, stripped-down NetPCs, server-based "dumb" Windows terminals, and handheld devices, which run the Windows CE operating system.

The Citrix software technology allows multiple users to access copies of applications running on a Windows NT server. The technology will be packaged with the popular Microsoft network operating system, though pricing and integration plans have not been finalized. Citrix WinFrame software currently runs on Windows NT Server 3.51, with a version for NT 4.0 currently in development.

Last month, investors filed a class-action suit against Citrix that charged that the company misrepresented its relationship with Microsoft and withheld knowledge of the Redmond, Washington-based company's plans to include multiuser capabilities within NT. Last week, Citrix announced an agreement to bundle the WinFrame package in Compaq Computer servers.

Microsoft also announced an agreement with Prologue Software, a company that offers similar technology to Citrix.