Microsoft's recent alliance with Citrix Systems to develop wide area network (Wan) optimisation technology represents a declaration of war on Cisco in the "critical battleground" of the branch office, Gartner has reported.

According to the analyst firm, the Redmond giant's tie-up with thin client firm Citrix is the culmination of a "long-simmering rivalry" with Cisco, and has the potential to transform the Wan optimisation market.

The comments come after Microsoft and Citrix announced an expansion of their established partnership that will result in a jointly developed and marketed Citrix-branded branch office box.

Gartner said that this product is scheduled to ship in the second quarter of next year and will be based on Citrix's WANScaler product line gained through its recent acquisition of Orbital Data, and on Microsoft's Windows Server and Internet Security and Acceleration Server.

"Microsoft clearly considers Cisco a significant threat to its dominance in the enterprise software market, and views the branch office as a critical battleground for application and network architectures," stated a Gartner advisory.

"Cisco and Microsoft have avoided direct competition until recently, but the merging of networking, security, storage and applications made this confrontation inevitable.

"Microsoft is launching new networking capabilities within Vista and the 'Longhorn' version of Windows Server, and is pursuing partners in the voice arena, for example Nortel."

The analyst firm also believes that there will now be much more conflict between Cisco and Microsoft, a battle it originally predicted in 1997.