The company released a flurry of announcements this morning intended to lay the groundwork for the attack.
These include the acquisition of virtualised applications enhancer Calista, a new deal with Citrix over support for Microsoft Windows Server 2008 and Windows Server 2008 Hyper-V, and a change to the licensing terms of Vista.
"Very few customers are able to reap the benefits of virtualisation today," said Bob Muglia, senior vice present of the Server and Tools Business at Microsoft.
"We estimate that fewer than five per cent of companies are using virtualisation technology because it is simply too cost-prohibitive and complex.
"Our approach is one of the most comprehensive in the market today, and one of the most economical. This combination brings a big strategic advantage and cost savings to customers."
Analysts believe that Microsoft is gearing up for a similar battle over the virtualisation market as it fought 10 years ago in the browser space, when it crushed Netscape by offering Internet Explorer for free.
Under the deals announced today Microsoft has paid an undisclosed sum for Calista, which produces software that speeds up applications and 3D functions in a virtualised environment. Microsoft will integrate the software into future virtualisation releases.
The company has also expanded its existing relationship with Citrix, which is developing tools to ensure greater interoperability with Windows Server 2008 a nd Windows Server 2008 Hyper-V.
"Extending our innovations to Windows Server 2008 and Windows Server 2008 Hyper-V enables us to deliver the industry's broadest virtualisation infrastructure that leverages the Windows platform," said Mark Templeton, president of Citrix Systems.
"The data centre is rapidly becoming the head-end for delivering applications and desktops from a dynamic server infrastructure.
"Providing expanded choice and powerful solutions for desktop, application and server virtualisation demonstrates Citrix's leadership and our shared vision with Microsoft."
Microsoft has also announced changes to the terms and conditions for consumer versions of Windows Vista so that they can be deployed on virtual systems.
The software giant has also cut the price of Windows Vista Enterprise Centralized Desktop by two thirds.
"This move is good for Microsoft customers," said Ben Rudolph, director of corporate communications at virtualisation firm SWsoft.
"It gives them more deployment and testing flexibility because they now have easy access to all versions of Vista."
VMware seemed unperturbed by Microsoft's announcements. "What we have been developing over the past seven years is what Microsoft is just starting to think about," said Raghu Raghuram, vice president of products and solutions at VMware.
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