A deal between Microsoft and 4-year-old software developer Softricity Inc. could make it easier for IT administrators to manage desktop apps from a single station. IT staff must in some cases keep track of hundreds or even thousands of apps located on individual desktops, a time-consuming and expensive task.

Softricity's SoftGrid software stores PC applications--such as Microsoft PowerPoint--on a server instead. The apps are then streamed to users as they're needed. Under a three-year deal revealed Tuesday, Microsoft will in certain markets bundle SoftGrid with its own server products, including SQL Server, BizTalk Server, Passport authentication, and the forthcoming .Net Server. Microsoft will support the effort with joint sales and marketing campaigns.

Softricity co-founder David Greschler says the deal "is as big as it gets" for his company, which is funded by Prism Ventures and Longworth Ventures. Greschler says integrating SoftGrid with Microsoft's .Net technologies will make it much easier for administrators to manage user access to desktop software. For instance, he says, Passport could be used internally to verify that an individual is authorized to use a given application.

He also says the release of .Net Server, slated to debut before year's end, will make the combination even stronger. For instance, SoftGrid and .Net server should work particularly well in thin-client environments, Greschler says. "We're expecting .Net to have particularly rich terminal-services functionality," he says.

He also says the fact that .Net server will be more closely integrated with SQL Server and BizTalk will make it easier for IT administrators to monitor and log application use.

That's key, not just for users but for application sellers--including Microsoft itself. Under the SoftGrid model, a single version of an application is installed on the server rather than multiple copies residing on numerous desktops. Companies pay for the application based on the authorized users.

The timing of the deal may be right, analysts say. Research firm International Data Corp. notes in a recent report that the app-server market, while stagnant this year, could boom beginning next year as tech spending increases and more CIOs integrate applications with middleware. "The market will be buoyed by the drive towards integration, speed, and ability to share information across the extended enterprise," says IDC analyst Daphne Chung. IDC says app-server software will represent a $1.1 billion market by 2006.