Microsoft is branching out into the virtualisation market, taking on the likes of VMware in this burgeoning sector. 

Microsoft is set to announce an alliance with Citrix Systems, which has long produced software solutions that enable disparate client computers to communicate with host servers.
Microsoft has also acquired Calista Technologies, which produces software that helps to speed applications running in a virtualised environment.
The price of Microsoft's Vista running on virtualised computers will also be cut, paving the way for consumer versions of the operating system to be run in a virtualised environment.
Virtualisation is an old concept, but relatively new as a working technology. So far the market leader is undoubtedly VMware, previously part of EMC but recently spun off in a highly successful IPO (initial public offering).
Apart from the Citrix alliance and Calista buy, Microsoft will also ship Hyper-V virtualisation software when it launches Windows Server 2008 later this year. Hyper-V is an important part of the company's virtualisation strategy as it allows applications to talk to a computer's hardware.