Microsoft and Cisco have joined forces to enable Cisco networking appliances to handle basic Windows Server 2008 functions such as network management and printing.

Cisco will embed a virtualisation component within its Wide-Area Application Services (WAAS) networking appliances that will allow users to run these Windows Server 2008 services locally rather than through a server in a central datacentre.

The Cisco kit will be available by the second half of this year, according to Baruch Deutsch, the company's director of product marketing. Aimed at corporate branch offices with light server and networking needs, such as bank branches or retail stores, the hardware will offer features including Domain Name Systems (DNS), Dynamic Host Configuration Protocol (DHCP), Active Directory and Print Services.

Centralised servers are easier to deploy and manage for companies without IT staff at each branch and can provide quicker, faster service. But they can also be more difficult to manage. The Cisco appliances are designed to provide the ease of centralised deployment and management - even through Microsoft's System Center management tools - while offering local performance, Deutsch said.

The announcement is the first fruit borne of last August's peace pact between Microsoft CEO Steve Ballmer and his counterpart at Cisco, John Chambers.

Long-time partners, Microsoft and Cisco are competing directly in the unified communications arena, widely considered a lucrative market of the future.

About one-fifth of all Windows Servers today are deployed in remote or branch offices, according to Bala Kasiviswanathan, director of branch and storage solutions at Microsoft.

Existing WAAS appliances start at $5,000 (£2511) each. Prices for the appliances with built-in server features have not been released yet.

A Windows Server 2008 licence will be bundled into the appliances. Thus, companies whose employees already have Windows Server client access licences (CALs) in order to access Active Directory and/or storage and printing resources will not need to buy additional CALs when using the Cisco gear, Kasiviswanathan said.

Companies with heavier Windows Server needs will probably still invest in a full on-premises server at each branch office, Kasiviswanathan believed.