Enterprises are to be offered a networking appliance from Cisco Systems that runs basic Windows Server 2008 functions, which the companies say will be a product designed for use in branch offices.

The companies said in February that they were working on a way for enterprises to run Windows Server 2008 services locally at a branch office on Cisco's Wide Area Application Services networking appliance. The alternative for many companies is either to use a full Windows Server at every branch, which could be overkill, or run all functionality centrally, which could result in slow performance for branch workers.

With the new product, called Windows Server on WAAS, branch offices can host services locally including Active Directory, Microsoft Print Services, Microsoft Domain Name System Server and Microsoft Dynamic Host Configuration Protocol Server. That can improve performance for branch workers and reduce costs related to wide area network connectivity and branch systems management. An IT administrator can remotely manage the Windows Server functions using Microsoft System Center.

Cisco used embedded virtualisation technology in its appliance to enable Windows Server 2008 to run on it.

Some companies that had early access to the product describe their experiences on a website set up by Microsoft and Cisco. Farm Credit Services of Mid-America had 180 Windows Servers company-wide, including one in nearly every branch, said Jim Curtis, director of infrastructure. His goal with Windows Server on WAAS is to move most of the branch servers to the company's data centre to make better use of a small infrastructure support staff.

He currently runs Active Directory centrally, but once the appliance setup is complete he could move Active Directory to the branches as a read-only function, improving log-in times for workers and mitigating potential security issues, he said.

The product is one example of Cisco and Microsoft working together while they also compete in other markets, such as unified communications.

Pricing for Windows Server on WAAS starts at $10,000 (£5,560), including the hardware and the software license. Other configurations with more storage are also available.