Perhaps spurred by VMware's acquisition last week of application virtualization company Thinstall, Microsoft has whipped out the checkbook and kicked its own virtualization strategy into high gear. In a webcast this morning (preceded by heavy PR prep) the Redmond company announced a number of additions and changes to their virtualization strategy which seemed squarely aimed at VMware's prodigious lead.

First, directly addressing the application virtualization segment, Microsoft has cut a deal for an unspecified amount to purchase Calista Technologies, an up and coming San Jose company specializing in remotely hosted virtual desktop solutions. This is the move which seems to speak most directly toward VMware's recent acquisition and shapes the battleground somewhat; the VMware solution, via Thinstall, virtualizes applications directly, while Calista's solution does more traditional full-PC virtualization. The latter, with the associated licensing fees, is no doubt more to Microsoft's liking (although previous Microsoft acquisition Softricity, an application virtualization company, is reportedly doing quite well).

Microsoft also announced a deeper relationship with Citrix, a long-time partner in terminal services and more recently a virtual services powerhouse courtesy their acquisition of Xensource last November.

Finally, they announced a substantial price cut in the licensing for their "Vista Enterprise Centralized Desktop," from $78 to $23 per seat.

All these moves point toward a company clearing the decks for action and reinforcing its offerings at all levels. In case the point was lost on some, Server and Tools senior VP Bob Muglia goes to the trouble of spelling it out, at each level, in a public memo.

VMware, not content to sit back and let Microsoft hog the "we deliver a complete end to end package" message, announced the beta release of Stage Manager, a management and automation tool for deployment that seems designed to rival Microsoft's System Center management structure.