Microsoft this week has moved to shore up its virtualised desktop credentials, after adding new features to its application virtualisation platform and introducing new licensing terms around various methods of desktop deployment.

Redmond has been pushing what it calls the "Optimized Desktop", which addresses centralised management and deployment of both physical and virtual resources.

The company said development on the newly named App-V 4.5 has been completed and that it will be included in the Microsoft Desktop Optimization Pack (MDOP) 2008 R2 that is set for release in a few weeks.

App-V (formerly Softgrid) lets users package applications up into "containers," store them on a server where they can be centrally managed, and then stream those containers to desktops, devices or shared PCs.

MDOP, which is only available to users with Software Assurance contracts, is designed specifically to help IT administrators manage collections of Windows desktops, including Vista SP1.

MDOP includes App-V; Enterprise Desktop Virtualization for managing and deploying virtual PCs; Asset Inventory Service, an inventory scanning tool; System Center Desktop Error Monitoring; Advanced Group Policy Management for change management via group policy objects; and the Diagnostics and Recovery Toolset, which helps in recovering a crashed PC.

MDOP is comprised of software from Microsoft's purchases of Softricity, Kidaro, AssetMetrix, Winternals Software and DesktopStandard.

With App-V 4.5, which is the first version developed under the company's Trustworthy Computing and Secure by Default guidelines, Microsoft has introduced integration with System Center management tools to help IT administer large deployments of virtual applications, including delivery over the Internet.

Microsoft is introducing the System Center Operations Manager 2007 Management Pack for App-V 4.5 servers and combining that with System Center Configuration Manager 2007 R2 and the App-V Group Policy Administrative template.

The combination lets IT administrators tap Configuration Manager to deploy virtual applications.

App-V 4.5 also introduces Dynamic Suite Composition (DSC), which lets virtualised applications share middleware resources such as a database.

"It is application virtualisation that saves you costs," says Scott Woodgate, director of Windows product management for Microsoft. "We believe that over time App-V will be as widely deployed on clients as Hyper-V will be on servers. We think application virtualisation is the primary technology that will be deployed on desktops in the next three years."

App-V 4.5 also has support for 11 languages, and introduces a service provider licence called Microsoft Application Virtualization 4.5 Hosting for Desktops. The licence lets service providers deliver non-Microsoft applications via the software-as-service model.

Microsoft also said it will expand the Vista Enterprise Centralized Desktop licence beyond its server-based Virtual Desktop Infrastructure so it can add deployment options for users. The new licence options, which take effect 1 January, 2009, add three deployment scenarios, including a $110 (£62) per PC, per year licence to stream a Windows Vista virtual machine image to employee-owned machines; another $110 license allows the same option for contract workers; and the third option is a $23 per PC, per year licence that allows workers to take home a Vista virtual machine image to another PC covered under (VECD) or to a PC at home.

Microsoft also announced that Citrix is releasing a version of Citrix XenDesktop that will integrate with System Center Virtual Machine Manager when that software ships later this month.