Microsoft Wednesday moved to shore up its virtualized desktop story adding new IT features to its application virtualization platform and introducing new licensing terms around various methods of desktop deployment.

Microsoft has been pushing what it calls the Optimized Desktop, which addresses centralized management and deployment of both physical and virtual resources.

The company said development on the newly named App-V 4.5 has been completed and that it will be included in the Microsoft Desktop Optimization Pack (MDOP) 2008 R2 that is set for release in a few weeks.

App-V (formerly Softgrid), lets users package applications up into "containers," store them on a server where they can be centrally managed, and then stream those containers to desktops, devices or shared PCs.

MDOP, which is only available to users with Software Assurance contracts, is designed specifically to help IT administrators manage collections of Windows desktops, including Vista SP1.

MDOP includes App-V; Enterprise Desktop Virtualization for managing and deploying virtual PCs; Asset Inventory Service, an inventory scanning tool; System Center Desktop Error Monitoring; Advanced Group Policy Management for change management via group policy objects; and the Diagnostics and Recovery Toolset, which helps in recovering a crashed PC.

MDOP is comprised of software from Microsoft's purchases of Softricity, Kidaro, AssetMetrix, Winternals Software and DesktopStandard.

With App-V 4.5, which is the first version developed under the company's Trustworthy Computing and Secure by Default guidelines, Microsoft has introduced integration with System Center management tools to help IT administer large deployments of virtual applications, including delivery over the Internet.

Microsoft is introducing the System Center Operations Manager 2007 Management Pack for App-V 4.5 servers and combining that with System Center Configuration Manager 2007 R2 and the App-V Group Policy Administrative template.

The combination lets IT administrators tap Configuration Manager to deploy virtual applications.

App-V 4.5 also introduces Dynamic Suite Composition (DSC), which lets virtualized applications share middleware resources such as a database.

"It is application virtualization that saves you costs," says Scott Woodgate, director of Windows product management for Microsoft. "We believe that over time App-V will be as widely deployed on clients as Hyper-V will be on servers. We think application virtualization is the primary technology that will be deployed on desktops in the next three years."