VMware this week announced upgrades to its approach to desktop virtualization at VMworld in San Francisco and said it was forming a new End User Computing division to better exploit the potential of serving all types of end users through virtual machines.

The product upgrades were the 4.5 release of VMware View, its system for creating and managing end user virtual machines, and the 4.6 release of ThinApp, its system for virtualizing applications on a central server. In an attempt to better compete with Microsoft, it said it was reducing the cost of desktop virtualization to $252 per seat. Microsoft makes several basic virtualization services, including Terminal Services and the Hyper-V hypervisor, available for free in Service Pack 2 of Windows Server 2008.

At the same time, VMware is playing catch up with Citrix Systems, a close Microsoft partner; VMware says it will soon be able to serve mobile end users, whether they are attached to the network or offline. Citrix first enabled offline desktops through XenClient, an end user hypervisor, which was made available separately last May and will be built it into its XenDesktop 4.0, feature pack 2, which becomes available later this month. VMware View 4.5 is also due to become available in September, with a provision called Local Mode operation for secure, offline virtual desktop operation.

View 4.5, which works atop VMware's vSphere 4 virtual machine management system, will double the capacity of a View management console from 5,000 virtual desktops to 10,000.

VMware didn't content itself with product upgrades. It also announced that it has added 3,000 VMware View seats via a new desktop virtualization customer, the Bank of Tokyo-Mitsubishi UFJ. The bank will eventually add 14,000 more seats, according to Vittorio Viarengo, VMware's VP of end user computing products, in a blog post on the day of the announcement.

Viarengo switched from earlier VMware arguments that desktop virtualization was a cost-saving and administration-simplifying force for the traditional desktop, to saying that the PC-based desktop was being dismantled by the forces of cloud computing and would eventually be replaced by a virtual desktop that would follow the end user around, regardless of what device the employee might be using.

"The desktop as we know it today is being pulled apart by the cloud," said Viarengo in his blog. "Interactions and applications are moving increasingly toward a variety of different devices at the edge of the cloud," he wrote. End user computing is moving onto centralized servers in the data center, which will eventually become the private cloud, he added. Likewise, new applications are tending to be built as software as a service to be distributed to end users off multitenant servers, he wrote.

"The future of enterprise computing goes way beyond a desktop, a physical platform, or a single operating system," said Viarengo in the announcement. The boldness of the claims drew a public retort from Microsoft, which took out a full page ad in USA Today on Aug. 31 to urge its customers to not sign three-year licenses with VMware. Instead they should consider instead getting their applications and virtual machine needs met through the Microsoft virtualization product line and Azure cloud services. "We already do what VMware says it's going to do," scoffed Mike Neil, general manager of Microsoft virtualization, in an interview at VMworld.

The ad drew a direct response from VMware CEO Paul Maritz in a press conference after he gave the VMworld keynote address Tuesday. "I consider it the sincerest form of flattery," he said.

VMware's desktop virtualization moves include:

-- Enhanced delivery of video and multimedia via LAN or WAN to virtualized desktops using VMware's PC-over-IP protocol. The protocol leverages the processing capabilities of the end user's device.

-- Simplified desktop configuration, provisioning, and management through View's central administrative interface.

-- Stronger security and controls over virtual desktops through the application of VMware Shield Endpoint, a security product meant to guard virtual desktops from viruses, intruders, and other malware, in conjunction with additional third-party products making use of a shared security API.

-- ThinApps enhanced with the ability to encapsulate an application so it can be updated, patched, or managed independently from its operating system. ThinApps 4.6 can be used to migrate applications to Windows 7 without requiring the application to be modified for Windows 7. It may continue to run in a virtual machine under Windows XP or Vista.

-- The Zimbra appliance or virtual machine now runs on the vSphere 4 platform. VMware purchased e-mail supplier Zimbra from Yahoo in January. Zimbra offers ease of administration, whether installed on premises or in a public cloud, Viarengo claimed.