Microsoft on Tuesday reaffirmed that its applications virtualization technology will be available only as part of a bundle of desktop-management tools and only to users with Software Assurance contracts.

At its annual TechEd conference, the company said its SoftGrid Application Virtualization will be sold only as part of its Microsoft Desktop Optimization Pack (MDOP) for Software Assurance. The SoftGrid technology has been touted as a way for users to reduce the costs of deploying and managing devices and migrating between versions of software.

Users such as Northeastern University report savings of 50% to 60% in people, time and network bandwidth via the use of SoftGrid.

And others such as the Alamance Regional Medical Center in Burlington, N.C., report a savings of $100,000 is downtime costs alone in one year.

SoftGrid, which Microsoft acquired when it bought Softricity in May 2006, lets users package applications into “containers,” store them on a server where they can be centrally managed and then stream those containers to desktops, devices and shared PCs. It also can be used for on-demand delivery of patches and upgrades.

Virtualization has become a major push for Microsoft as it competes to catch up with VMware, the market leader in virtualization. Microsoft has a three-tiered virtualization plan that covers servers, applications and system services.

Server virtualization is being updated as part of Windows Server 2008 and will be delivered to all users of that platform no more than 180 days after the server ships at the end of this year, the company says.

SoftGrid, however, will be available only to users with Software Assurance maintenance contracts. Microsoft has been beefing up the controversial maintenance package for a number of years by adding incentives, such as home-use rights and the ability to run Vista within virtual machines on server hardware.

“We really think [Software Assurance] is where [SoftGrid] belongs,” said Winni Verhoef, senior product manager focused on MDOP at Microsoft.

While SoftGrid was priced at about $200 a user before Microsoft acquired the software, it will be available for $10 per user per year as part of the MDOP bundle.

“When we think about Software Assurance at Microsoft that is the way we are best capable to help our customers build dynamic systems to be that flexible computing environment where they can have access to whatever they need, whatever applications data or information resource they need.”

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