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Application Virtualization: The Next Frontier

Published: June 22, 2007

How Microsoft® SoftGrid® Application Virtualization technology can help organizations curb IT costs, boost user productivity, improve service levels, and increase business agility

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Executive Summary
Virtualization Can Help Curb Rising IT Costs
Advantages of Application Virtualization
Application Virtualization with SoftGrid
Business Value and Return on Investment
Real-World Savings with Microsoft SoftGrid Application Virtualization
About the Author
Additional Resources

Abstract: IT departments today are struggling to cut costs while increasing operational agility, delivering superior service, and maintaining high customer satisfaction. Application virtualization with Microsoft SoftGrid can help with all of these goals. By converting applications into virtual services that are managed and hosted centrally but run on demand locally, application virtualization reduces the complexity and IT labor involved in deploying, updating, and managing applications. In addition, because the virtualized applications run in their own environment on client machines, this can considerably reduce the application footprint on the operating system thus reducing application & operating system conflicts. The segregation and elimination of applications-OS conflicts can be instrumental not only for reducing IT operating expenditures but also for reducing the need for regression testing or for server silos. Last but not least, during OS migration, such as upgrades from Windows XP to Windows Vista platform, application compatibility issues that traditionally plagued OS migration can now be taken head-on. In short, by helping IT organizations decrease total cost of ownership (TCO), increase service levels, and more easily respond to changing requirements, application virtualization can serve as a strategic tool that delivers a significant competitive advantage and allows your organization to move further along the infrastructure optimization continuum.

Executive Summary

Information technology (IT) executives are under constant pressure to find ways to help their organizations reduce operating expenses and increase operational agility—while at the same time managing regulatory and security concerns, meeting stringent service levels, and maintaining high levels of customer satisfaction. The struggle to reduce costs is made even more challenging by the exponential growth in processing power that corporations have experienced in recent years. As hardware costs continue to decline, server and desktop sprawl results, adding such new concerns as excessive power utilization, data center overheating problems, and isolation of different types of information in server and desktop silos. And those are just the hardware problems.

On the software side, the increased frequency and complexity of application deployment is taking its own toll on IT departments. A recent survey by Gartner shows that organizations across the globe spend 70 percent of their IT budget maintaining what they have and only 30 percent on new initiatives.i Finding a way to curb the ever-increasing cost of maintaining existing applications and systems has become the Holy Grail for the industry.

Together, these hardware and software trends are resulting in spiraling administration costs and reduced utilization of IT assets.

But there are bright spots on the horizon—technological innovations that promise to help IT departments cope with these challenges. Among these, virtualization technology is a top contender for providing relief. Virtualization is a technique for hiding the physical characteristics of computing resources from the way in which other systems, applications, or end users interact with those resources. Aided by a new generation of dual-core processors and advances in grid and distributed computing, virtualization technology is poised for rapid growth. The technology takes several forms, including the use of virtual machines for server and desktop consolidation, software as a service (SaaS), and the new kid on the block, application virtualization. The most advanced application virtualization solution is the Microsoft SoftGrid technology, with which Microsoft aims to take a pioneering role in the application virtualization marketplace.

Application virtualization differs from other forms of virtualization (machine, storage, or network) because it does not require heavy investments in hardware, personnel, or core infrastructure. As implemented in SoftGrid, application virtualization enables applications running on the Windows® operating system to be converted into virtual services that are managed and hosted centrally, but that run on demand locally—on client computers connected to intranet (LAN, WAN, VPN), Internet, or wireless networks.

Application virtualization with Microsoft SoftGrid goes a long way toward helping IT shops reduce management costs. For example, it can help organizations adopt several of the best practices that recent IT labor and end-user cost studies have identified as significantly reducing the cost of managing desktops and applications running on the current version of the Windows operating system (see Table 1).ii,iii

Table 1: IT Labor and End-User Cost Savings Linked to IT Best Practices

IT best practice

Potential cost savings

SoftGrid implementation

Standardizing on a single desktop operating system

$110 per desktop per year

SoftGrid can help reduce the number of operating system builds and images required.

Centrally managed PC configuration and settings

$190 per desktop per year

With SoftGrid, applications can be streamed only to sanctioned and approved users.

PC managed by Group Policy objects

$120 per desktop per year

SoftGrid streams applications to users based on their Active Directory® Group membership.

Comprehensive, centrally managed security program

$130 per desktop per year

Because SoftGrid technology allows applications to operate in a “virtual bubble,” IT administrators can reduce privilege levels on workstations to the minimum settings.

Automated user provisioning

$50 per desktop per year

SoftGrid integrates with the Active Directory Service Interfaces for user permissions and provisioning.

Centrally managed PC application installation

$70 per desktop per year

SoftGrid application packages are hosted and distributed from a central server.

In brief, Microsoft SoftGrid helps IT shops lower costs and enhance service by reducing the complexity and labor involved in deploying applications to desktops, portable computers, and terminal servers, as well as the complexity of keeping applications up-to-date. The fact that SoftGrid runs applications locally is a key difference from past attempts at virtualization, based on technologies such as Microsoft Windows Server® Terminal Server or Citrix. Because that approach required applications to be centrally hosted and centrally run, it led to mushrooming growth in servers, along with an increase in both hardware purchase costs and hardware maintenance costs. Furthermore, to prevent application conflicts in multi-tenancy situations, IT shops had to create separate instances of servers to host the various applications—a practice that further encouraged the growth of server silos and that resulted in increased management complexity and higher administrative costs.

In contrast, SoftGrid technology offers the ability to deliver and manage applications centrally while allowing client computers to run the applications locally. This approach reduces both hardware proliferation issues and multi-tenancy application conflicts. It also provides all the benefits of SaaS—such as ease of access, ease of distribution, and ease of management—to earlier client-server applications.

SoftGrid technology offers IT professionals an innovative way to increase operational efficiencies in a short amount of time by reducing the direct IT costs of application deployment, application updates, service desk usage, other types of support, IT management, and regression testing. SoftGrid can also help curb several indirect IT costs, such as software and regulatory policy management, license management, and customer satisfaction.iv In addition, because it can be employed at almost every stage of the application management life cycle, SoftGrid can help IT organizations reduce TCO and increase service levels across the board. In this way, SoftGrid can be a strategic tool for organizations seeking to gain a competitive advantage.

This white paper explains what application virtualization is, how it works, and how it can help senior architects and IT decision makers curb the exploding costs of application deployment and management. It concludes with examples of real-world savings that companies have realized by moving to application virtualization with SoftGrid technology.

Virtualization Can Help Curb Rising IT Costs

Today, IT organizations across the globe are dealing with new and extreme challenges, which they must overcome if they are to thrive and compete in the marketplace. Among these challenges are:

  • An onslaught of security threats (including system breaches and data theft).

  • The increasing cost of application support, deployment, and updates.

  • Demands from both internal and external customers for higher-quality IT services and faster delivery of services.

  • A proliferation of server and desktop systems, resulting in data center and desktop infrastructures that are overly complex and difficult to manage. Not only does this growth and complexity drive up management costs, but the inflexible nature of the assets means that costs tend to remain fixed regardless of changing business requirements.

Virtualization technologies can help IT organizations overcome most of these challenges. The attractiveness of virtualization lies in its ability to create dynamic computing environments. Virtualization frees each element of the computing environment from the other elements. As a result, each layer of the system can use resources generically, without needing to be configured for a specific system. In addition, because each element of the computing environment no longer has an assigned identity or role (such as a server that runs only engineering data), a virtualized environment enables the organization to use its resources much more efficiently, dynamically assigning each element to whatever purpose or task most needs the resources.v

Today it’s difficult to imagine an IT department that—if it hasn’t already virtualized the commodity resources under its administration—is not at least considering such virtualization. The reasons for the increasing trend toward virtualization vary from one organization to the next. An organization may be motivated by the desire to employ new technology solutions, the need to increase hardware capacity, a requirement for better disaster recovery and fault tolerance abilities, or the need to simplify system and resource administration. Regardless of their individual reasons, all organizations deploying virtualization have in common one simple goal: the promise of tremendous cost savings.

Virtualization Already in Wide Use

Forms of virtualization that are already proliferating rapidly include networking, hardware, storage, machine, management, and session virtualization—and application virtualization is poised to join them. (See Table 2.) As an example of how the use of virtualization technologies is growing rapidly, consider server virtualization. IDC projects that, by 2010, 1.7 million physical servers will offer virtualization resources for guest operating Server virtualization addresses the issue of resource allocation and balancing as well as application conflicts in multi-tenancy situations by spinning multiple instances or partitions of guest “virtual” operating systems on top of a single host physical system. This approach also provides such key capabilities as dynamic resource provisioning and disaster recovery.

However, it does have some drawbacks. First, setting up the virtual servers requires high-end hardware and involves administrative and set-up labor costs. Second, while server virtualization can save money by consolidating physical server silos, the proliferation of virtual server silos increases the management burden for IT staff. Third, the approach creates problems for users in that virtual servers do not support such resource needs as high-end graphics or USB ports, and they can also lead to performance degradation. Finally, the host operating system still represents a single point of failure, which can have ripple or cascade effects on the guest operating system.

Table 2: Virtualization Technologies Across Computing Resources

Technology classification

Virtualization component


Localizing dispersed resources inside and outside the network edge

  • VPN (virtual private network)

  • VLAN (virtual local area network) and VWAN (virtual wide area network)

  • Virtual provisioning and security

Hardware (processors and capacity)

Enables hardware to change computing tasks in real-time

  • Intel VT and AMD-V

  • Grid and cluster computing

  • Distributed or P2P (peer-to-peer) computing


Storage and backup over the network

  • iSCSI

  • VSAN (virtual storage area network)

  • Microsoft Virtual Hard Disk (VHD) Image Format Specification

Machine/operating system (servers and clients)

One machine; multiple operating systems

  • One-to-many (host and guest operating systems)

Management and administration (servers and clients)

Resource management and administration of virtual machines

  • Virtual machine (server and client) management


Any application on any computer, on demand, via any network

  • Application virtualization

  • Application streaming


One machine, multiple synchronous/ asynchronous sessions

  • Desktop or session streaming

Application virtualization is the next frontier for IT decision makers. This form of virtualization, through the use of SoftGrid technologies, can help eliminate many of the problems that server virtualization is unable to address cost effectively:

  • It does not require high-end hardware -organizations can use their existing Windows-based desktop computers.

  • It does not produce the decentralization created by having multiple guest operating systems. Because each application operates in its own virtual environment, no secondary operating system partition is necessary.

  • The management burden created by having multiple virtual machines does not exist because administrators are concerned about one physical operating system rather than multiple guest operating systems.

Virtualization Technology Has a Long History

Virtualization is not new: It’s been employed in mainframe computers for decades. For example, IBM introduced its virtual machine (VM) Hypervisor technology back in 1968—and in 1988, it introduced Processor Resource/System Manager (PR/SM) technology, which enabled IT staff to create multiple logical partitions, so that several full-scale operating systems could operate concurrently on the same physical mainframe.vii Such virtualization enabled mainframes to get more done with fewer resources and less overhead.

Now, by applying these same virtualization concepts to application management on commodity servers, organizations can achieve similar increases in agility, improvements in service level, and cost reductions— without experiencing the server silo proliferation headaches created by server virtualization.

Microsoft Contributions to Virtualization

Microsoft is no newcomer to virtualization, as Table 3 illustrates. Microsoft has long offered products that provide virtualization capabilities across a broad range of computing technologies, including networks, hardware, storage systems, operating systems, and sessions. Application virtualization via SoftGrid is one of the latest contributions from Microsoft to this growing field.

Virtualization is also one of the key building blocks of the Microsoft Dynamic Systems Initiative—a collection of products and services designed to help organizations be more agile and responsive to changing business needs. Virtualization technologies contribute to this initiative by providing such critical capabilities as dynamic resource provisioning, scalability, self-healing, and fault-tolerance.

The next generation of operating systems from Microsoft, such as Windows Server code name “Longhorn” and Windows Vista, have the necessary building blocks for deploying and managing virtualization on a large scale for both desktop and server computing. Furthermore, Microsoft is also working on management tools that IT organizations can employ to manage the virtualized resources in their IT environment.

Microsoft also is collaborating with the members of the open source community, including Novell and XenSource, to develop a framework that would allow interoperability between heterogeneous systems.

Table 3. Microsoft Contributions to Virtualization

Technology Classification

Virtualization Component

Microsoft Product


Localizing dispersed resources inside and outside the cloud

  • VPN

  • VLAN and VWAN

  • Virtual provisioning and security

  • Microsoft Internet Security and

  • Acceleration (ISA) Server

  • Whale Intelligent Application Gateway

  • Network Access Protection (NAP)

Hardware (processors and capacity)

Enables hardware to change computing tasks in real-time

  • Intel VT and AMD-V

  • Grid and cluster computing

  • Distributed or P2P computing

  • Windows Vista™ and Windows Server “Longhorn”

  • Windows Server 2003 Datacenter Edition

  • Microsoft Windows Compute Cluster Server

  • High-performance computing (HPC)


Storage and backup over the network

  • iSCSI

  • VSAN

  • VHD

  • Microsoft Windows Unified Data Storage Server

  • Windows Server “Longhorn”

  • Microsoft Windows Storage Server

  • Microsoft System Center Data

  • Protection Manager

Machine/operating system (servers and clients)

One machine; multiple operating systems

  • One-to-many (host and guest operating systems)

  • Microsoft Virtual Server and Microsoft Virtual PC

  • Windows hypervisor technology

Management and Administration (servers and clients)

Resource management and administration of virtual machines

  • Virtual machine (server and client) management

  • Microsoft System Center Virtual Machine Manager

  • Microsoft System Center Solution for IT Service Management code name “Service Desk”


Any application on any computer, on demand, via any network

  • Application virtualization

  • Application streaming

  • Microsoft SoftGrid Application Virtualization


One machine, multiple synchronous/ asynchronous sessions

  • Desktop or session streaming

  • Terminal Services

  • Remote Desktop

Advantages of Application Virtualization

Traditionally, only server-based applications were considered to be mission-critical. Today, as more workers depend on desktop applications such as the Microsoft Office Outlook® messaging and collaboration client, Microsoft Office Word, and Microsoft Office Excel® spreadsheet software to carry out their daily business, the line between server-based mission-critical applications and desktop-based applications is blurring. Consequently, issues such as fault tolerance, self-healing, disaster recovery, performance, and mobility that were once reserved for server applications are increasingly required on desktop computers.

Even though more enterprises are adopting n-tier Web-based systems, the era of thick-client and legacy client-server applications is nowhere near an end. In order to provide some level of resilience for desktop applications, IT shops are now seeking new approaches to the age-old problem of improving desktop reliability and security. Two such solutions are application or session streaming, which occurs when applications are hosted on Terminal Server or Citrix, and application virtualization, which can be achieved with SoftGrid.

Application or session streaming does go a long way toward solving centralized management and disaster recovery issues, but the technology does little to resolve compatibilities—both compatibilities between applications and compatibilities between applications and the operating system. The other problems with application or session streaming are that it can be a single point of failure and that it can create a resource bottleneck. To avoid these disadvantages, organizations build server silos to prevent conflicts between applications, and between applications and operating systems, and set up multiple servers to provide scalability and to avoid having a single point of failure. However, this approach increases the management burden on IT staff, resulting in increased labor costs. It also creates a ballooning IT budget with increased capital expenditures for the procurement and deployment of the new hardware.

Application virtualization with SoftGrid, however, delivers the best of both worlds, enabling applications to be managed, stored, and maintained centrally but distributed over a network and executed locally on client computers. In doing so, it not only reduces IT labor costs, but also provides a more flexible computing environment that enables businesses to respond more quickly to changing needs.

Application virtualization differs from the traditional computing approach, in which systems are configured (usually manually) to be static environments that support a single solution, with all components treated as products that are installed and configured for specific computers. For example, in a traditional computing environment, hardware is dedicated to specific uses, such as a Web server or database; the operating system is tied to the hardware (one box runs Windows, the other UNIX); and storage is handled in specific locations. On top of all these layers are applications, which are installed to run inside this specific, static environment. This computing structure requires significant testing because all layers of the environment must be hard-coded to work together. The result is a tightly bound configuration that does not adapt well to changes in business needs or to the introduction of new and updated applications.

In a virtualized system, in contrast, applications become on-demand utilities that are as easy to use as electricity. No longer tied to specific systems and departments, they can be used on any system, in real-time, on an as-needed basis. Because this approach makes it easy to dynamically add, update, and support applications and systems, application virtualization creates the foundation for a much more nimble, competitive business environment—one that uses minimal time and resources. As a result of the increased simplicity of IT environments that use application virtualization, IT organizations can significantly reduce their labor costs. Virtualization can assist in curbing labor costs associated with supporting applications and desktop computers plus it can help IT organizations improve service levels and increase business agility. viii

Application Virtualization with SoftGrid

SoftGrid provides a single, unified solution for managing application virtualization so that applications can be deployed wherever they are needed, in real time. SoftGrid transforms Windows applications from products that must be installed locally into virtual services that are centrally configured, managed, and deployed on-demand to all Windows-based computers in the IT environment, whether desktops, portable computers, or Terminal Services/Citrix servers.

Figure 1. Overview of SoftGrid

Figure 1. Overview of SoftGrid

Figure 1 provides an overview of the physical components of SoftGrid, which work together to help ensure seamless application deployment and management. Key components include:

  • Microsoft System Center Virtual Application Server: The Virtual Application Server streams applications to SoftGrid-enabled computers (both desktops and terminal servers). It authorizes and authenticates requests for application services and provides the necessary security, metering, monitoring, and data gathering for complete centralized management.

  • SoftGrid Client (Microsoft SoftGrid Application Virtualization for Desktops): The SoftGrid client is installed once on the user’s computer. It communicates with the System Center Virtual Application Server, receives streamed applications, and allows them to be locally and securely executed at the client—without requiring the applications to be physically installed on the user’s machine.

  • SoftGrid Management Console: The SoftGrid Management Console is the central management tool for setting up, administering, and monitoring one or more SoftGrid servers. Administrators can also use the Management Console to assign application rights and licenses to users and organizational units.

  • SoftGrid Sequencer: The SoftGrid Sequencer is a wizard-based tool that automatically enables applications to work with the SoftGrid system -without making any changes to the application source code.

  • SoftGrid SMS Connector: The Microsoft SoftGrid SMS Connector has been designed to provide a single management interface for both locally installed and virtualized applications. The IT Administrator now has the option to push entire virtualized applications to client computers using SMS deployment delivery or pull them on-demand with SoftGrid’s streaming technology—or both. By integrating application virtualization into SMS, enterprises can accelerate their deployments, and cut the costs of their application deployments.

Figure 2. Virtualized SoftGrid components

Figure 2. Virtualized SoftGrid components

As illustrated in Figure 2, SoftGrid includes several virtualized components that are part of the application binary package and are distributed to the client computers running the virtualized applications. By virtualizing these components, SoftGrid helps solve many of the pain points that today exist in the application management life cycle, such as the need to perform regression testing and implementing techniques to eliminate application conflicts (such as server silos). Virtualizing these components also reduces the registry stack—and therefore potentially decreases boot time.

SoftGrid virtualized components include:

  • Virtualized data, such as user profiles and documents

  • Virtualized system services, such as Windows services, COM (component object model), OLE (object linking and embedding), fonts, and cut-and-paste capabilities

  • Virtual configurations, such as registry, .ini files, and DLLs (dynamic-link libraries). Currently, SoftGrid does not virtualize or package any kernel-level components or device drivers.

SoftGrid and Systems Management Server: Better Together

Those organizations that have already heavily invested in Microsoft Systems Management Server (SMS) could leverage SoftGrid’s SMS Connector for the integration. The Microsoft SoftGrid SMS Connector has been designed to provide a single management interface for both locally installed and virtualized applications. The IT Administrator now has the option to push entire virtualized applications to client computers using SMS deployment delivery or pull them on-demand with SoftGrid’s streaming technology—or both. By integrating application virtualization into SMS, enterprises can accelerate their deployments, and cut the costs of their application deployments. Virtual applications run exactly as locally installed applications, with full performance, functionality, and access to local services—including cut and paste, OLE, printing, network drives, and attached devices. However, now they execute within an isolated “sandbox,” protecting the underlying operating system and other applications from the new applications. This eliminates application collisions and the need for time-consuming compatibility testing, helps keep the operating system and client machine pristine, and enables “damaged” applications to be instantly refreshed without ever visiting the client. In addition, because virtual applications no longer have to be pre-installed in images, SoftGrid reduces the footprint and total inventory of images, saving time for desktop administrators.

Figure 3. SoftGrid SMS integration

Figure 3. SoftGrid SMS integration

The combination of SMS and SoftGrid allows customers the flexibility to choose the best way to deploy applications while maintaining OS level patches, updates, inventory, asset tracking, and much more from a single, integrated management point. The SMS Connector for SoftGrid ships with SoftGrid in the Microsoft Desktop Optimization Pack for Software Assurance.




Bare Metal OS Deployment



OS Updates/Service Packs



OS Security Patches/Hotfixes



Deployment of Core (locally installed) applications



Patching/Upgrading of Core (locally installed) Applications



Administrator Provisioning of Applications



Remote Control of Clients



Distributed Branch Architecture



Virtualized Packaging (Sequencing)



SystemGuard™ Application Virtualization



On-Demand Application Streaming



Package/Active Upgrade



End-user Roaming/Hoteling



Virtual Application Disaster Recover



Asset Management of Hardware and Locally Installed and Virtual Applications



How SoftGrid Application Virtualization Works

SoftGrid employs an innovative system for centrally deploying applications. Rather than installing entire applications, the first time a user requests one or more applications, the SoftGrid client rapidly “pulls,” or downloads, the necessary software package from a central SoftGrid server to the user’s Windows-based desktop computer or Terminal Server. This happens without degradation in functionality or response time: Applications launch within seconds, with the exact time depending on application size and connection speed.

When the virtualized application is launched by the user, it runs in a “bubble” (SystemGuard™), which isolates it both from other applications and from the computer’s operating system. As the user modifies application settings, the changes are stored in the user’s profile. Next time the user launches the application, it will launch with the user’s preferred settings.

When a SoftGrid session terminates, the user’s settings are cached on the local computer, providing instant access for subsequent use with little impact on bandwidth -even if the network goes down or users detach from the network. Users enjoy continual access because the code SoftGrid sends to the client computers enables applications to run locally with full functionality, whether connected or disconnected from the network and the SoftGrid server. Figure 3 shows the steps involved in deploying a virtualized application.

Figure 4. How SoftGrid on-demand application delivery works

Figure 4. How SoftGrid on-demand application delivery works

SoftGrid Value Proposition for Enterprise Computing

SoftGrid can help reduce the complexities inherent in deploying and updating applications to desktop computers, portable computers, and terminal servers, eliminating many of the tedious, labor-intensive stepsinvolved in the application management life cycle. Through application virtualization and on-demand streaming,SoftGrid enables applications to run without there ever having to be installed on a desktop, portable computer,or server.

Instead, SoftGrid instantly delivers applications to the desktop resource that needs them, upon user demand andwithout an impact on the host operating system or other applications. One of the most comprehensivevirtualization technologies on the market, SoftGrid virtualizes user sessions, user profiles and Windows services,as well as other subsystems, such as the registry, .INI files, and DLLs.

Figure 4 summarizes SoftGrid benefits, which include:

  • Ending application conflicts and regression testing. Because SoftGrid runs applications within the isolated bubble (SystemGuard) environment, it helps prevent applications from conflicting with each other or with the underlying operating system. As a result, it reduces the need for time-consuming regression testing.

  • Improving server utilization and management. This same isolation from other applications reduces the need for server silos, increasing server utilization and return on investment while streamlining server management.

  • Managing software assets. Because SoftGrid manages and delivers applications centrally, it makes it easier for companies to add and remove software assets from their portfolio.

  • Stabilizing Windows profiles. SoftGrid writes user preferences and settings to a separate SoftGrid profile, rather than to the Windows user profile. By minimizing changes to the Windows profile, it reduces the likelihood of profile corruption.

  • Tracking application usage. Every time a user initiates an application, the SoftGrid client communicates with a centralized server, making it possible to track application usage in real time. The ability to easily see how applications are—or are not—being used helps IT departments to better manage license compliance.

  • Consolidating applications. By ensuring that all versions and updates of an application are consolidated in a self-contained package, SoftGrid makes it easier for IT departments to optimize their libraries of Microsoft Windows Installer (MSI)–based applications.

  • Providing centralized, policy-based management. SoftGrid manages application deployment, updates, and termination for all users—including mobile and disconnected users—through policies administered from a single console. It also enables remote management of SoftGrid clients, active upgrade of virtualized applications, one-click migration of software policies to users, and real-time concurrent user session management.

  • Consolidating and standardizing operating system images. By decoupling applications from the operating system, SoftGrid minimizes their footprint on the operating system. As a result, it reduces the complexity of the operating system image and minimizes the number of such images that are needed.

  • Providing business continuity in the event of a failure. SoftGrid enables applications and updates to be automatically replicated to backup servers—just like data. As a result, it cuts user downtime in the event of a server or desktop failure from hours or days to just minutes.

    Figure 5. SoftGrid value proposition for enterprise computing

    Figure 5. SoftGrid value proposition for enterprise computing

Business Value and Return on Investment

As illustrated in Figure 5, SoftGrid can help IT departments streamline and simplify each stage of the application management life cycle, from packaging to termination. In doing so, it speeds service time to market, increases the organization’s flexibility and agility, and brings IT environments closer to a utility computing model—that is, one in which software applications are as simple to access and use as electricity is today.

Figure 6. Application management life cycle stages streamlined by SoftGrid

Figure 6. Application management life cycle stages streamlined by SoftGrid

The time and cost savings that an IT organization can achieve by streamlining and simplifying the application management life cycle depends on many factors that are specific to each organization. That’s why Microsoft worked with Forrester Consulting to develop SoftGrid ROV (Return on Virtualization) Calculator based on the ROI model in February 2006 using its proprietary Total Economic Impact™ methodology. ROV is a tool that organizations can leverage to calculate what application management is costing them today, compared to what it would cost if they implemented SoftGrid. The Calculator includes a comprehensive questionnaire that gathers detailed data about the company’s business and technology environment, examining every step in the application management life cycle in order to determine its true costs to the organization and includes the time and associated costs not only of IT staff, but also of users who experience downtime during the various processes. The calculator then determines how much time and money can be saved through application virtualization with SoftGrid. None of the numbers in the Calculator are hard-coded: Every assumption and number can be changed to reflect the reality of a company’s operations.

Measurable benefits provided by SoftGrid include the resource savings achieved by deploying applications as virtual services along with increased speed with which applications can be deployed using SoftGrid. An analysis of SoftGrid customer environments have shown on average:

  • A 30 percent reduction in application-related help-desk call volume and time

  • A reduction of more than 80 percent in overall application life cycle costs

  • A 40 percent consolidation of servers, as well as increased consolidation of application images and terminal server silos

  • A fourfold increase in user uptime

  • A payback period of 4 to 10 months

SoftGrid also generates savings from:

  • Centralized license enforcement and usage metering

  • Better application security, due to centralized policy management

  • Greater business continuity and faster disaster recovery

  • Support for branch offices (servers and desktops) as a result of centralized application management and application replication capabilities

  • Support for multiple versions of an application running simultaneously on the same desktop

  • Greater ease in providing application access to roaming and mobile workforce

  • Easier operating system migrations as a result of consolidation of operating system images and elimination of the need for regression testing

  • Increased efficiency and scalability of Terminal Services and Citrix server farms, due to consolidation of servers

For examples of the specific savings that can be achieved with SoftGrid, see the next section, “Real-World Savings.”

Figure 6 illustrates the many steps typically performed as part of application deployment, update, support, and termination that can be reduced or eliminated through use of SoftGrid, resulting in a reduction in the time and cost of managing applications over their life cycle.

Figure 7. Time-consuming application management steps reduced or eliminated by SoftGrid

Figure 7. Time-consuming application management steps reduced or eliminated by SoftGrid

Real-World Savings with Microsoft SoftGrid Application Virtualization

Companies that have deployed SoftGrid have reduced application management costsix while also decreasing the time required to deploy, migrate, and update applications. In addition, by using SoftGrid, companies have been able to consolidate servers, enhance desktop security, and more efficiently support branch offices. Consider the following examples:

Reduction of application management costs

  • Scotland’s Dundee City Council saved US$290,000 (£155,000) in one year on IT support, server consolidation and license agreements.

  • University of Illinois Medical Center estimates that it has cut per-year deployment costs for 75 applications from $43,000 to just under $1,500; reduced update costs from $137,000 to $5,900; and slashed termination costs from $13,000 to under $500.

  • Heartland Financial, with headquarters in Dubuque, Iowa, has reduced its help-desk calls from an average of two hours to ten minutes, resulting in significantly lower support costs.

  • Stockholm, Sweden–based Feelgood healthcare provider has reduced the volume of help-desk calls from 350 calls per month to less than 150.

Acceleration of application availability and reduction of tedious processes

  • University of Illinois Medical Center has eliminated the approximate 100 hours of testing previously required for deploying a single application.

  • Frankfurt, Germany–based Sanofi-Aventis Deutschland GmbH has cut application deployments and updates from two weeks to three hours.

  • Seattle’s Swedish Medical Center cut their per-application migration time from 40 days to just four hours.

  • Free University of Amsterdam previously required at least three to five days to package an application for electronic software delivery. Now it takes only two days to sequence an application.

  • TNT Express Belux, based in Brucargo, Belgium, reduced application refresh time to just seconds.

Consolidation of terminal servers

  • Jacksonville, Florida–based Fidelity National Financial was able to consolidate and eliminate 13 terminal servers.

  • Tacoma, Washington–based Russell Investment Group and Dallas, Texas–based ACS Healthcare Services each reduced the number of servers by 40 percent.

  • Purdue Pharma expects its adoption of SoftGrid to reduce its 90 terminal servers to just 45.

  • TNT Express Belux has consolidated its servers by 30 percent. It now uses just 13 servers to run 80 applications.

Improved desktop security

  • British Columbia School District now needs only four IT staff members to secure applications on 2,000 computers, shared by 7,800 students.

  • ACS Healthcare Services has enhanced operating system security by enabling applications to be run on “plain vanilla” servers, without having to install applications to the operating system.


The landscape of enterprise computing is constantly changing, and the stakes and demands continue to rise exponentially. As IT departments struggle to balance the cost of application management against ever-increasing demands for higher service levels and improved business agility, application virtualization with SoftGrid offers an attractive solution—one that simplifies the burden of managing the application life cycle. By reducing such direct IT costs as application deployment, regression testing, service desk usage, other types of support, and IT management, SoftGrid enables IT departments to meet the seemingly contradictory goals of cutting costs while improving service levels.

With the deployment of the Microsoft SoftGrid technologies, applications can become on-demand utilities that are as easy to use as electricity. Rather than being tied to specific systems and departments, virtualized applications can be deployed in real-time wherever they are needed. Because SoftGrid enables IT organizations to easily add, update, and support applications, it can serve as a strategic tool with which businesses can be more nimble in reacting to changing market conditions.

The dawn of the next generation of Windows Operating System “Windows Vista” will pose some planning and deployment challenges to the IT shops across the globe, however, with the right planning and tools, such as SoftGrid, the IT decision makers have the perfect opportunity to test drive and adapt application virtualization to reduce the cost and time associated with regression testing and to firmly deal with issues such as application compatibility, version compatibilities and application deployment and updates.

In fact, IDC has the following to say about virtualization: “Virtualization should be seen not as a technology that creates migration and consolidation work, but rather as a game-changing technology that enables dramatically different deployment scenarios for IT professionals, enabling them to break the historical bond between operating systems, applications, and the underlying hardware platform.”x

The move to application virtualization has already begun. The choice for IT decision makers is to be left behind or tackle the issue head on. Please visit the Microsoft website at to learn more and to see how others have already realized the advantages of application virtualization and are on their way of achieving the operational agility.

About the Author

Omer Qureshi is a Technology Development Manager (TDM) with the Enterprise Partner Group (EPG) responsible for technical strategy and solutions development for global system integrators and outsourcers specifically as it relates to core infrastructure optimization. Omer has more than 12 years of experience in the field of infrastructure, network, and security management and holds several advanced industry certifications such as MCP, MCSA, MCSE, CCDA, PMP, BEA, and CompTIA Security+.

Prior to his current assignment, Omer worked at Bank of America for almost seven years. There, he was involved in various assignments, including application development and integration, systems engineering and architecture, and project and team management, and he served as Operational Risk Manager. In this role, Omer carried out strategic corporate governance functions and became the youngest vice president at Bank of America. Omer has also held positions at American Express, Snow Ball/IGN (a dot-com company located in Silicon Valley), and Voyager Net (an Internet service provider located in the Midwest).

Additional Resources

i   Source: Gartner IT Spending: Its History and Future:

ii   Current Windows software is defined as any version of the Windows operating system released prior to Windows Vista™. Systems management software profiled in Microsoft and Microsoft sponsored IDC studies includes the Active Directory service of the Windows Server 2003 operating system and Microsoft Systems Management Server 2003.

iii   Sources:

  • Barna, William. “Infrastructure Optimization: Driving Down Costs of the Business Desktop.” Microsoft. April 2006.

  • IDC White Paper sponsored by Microsoft, “Optimizing Infrastructure: The Relationship Between IT labor Costs and Best Practices for Managing the Windows Desktop,” Doc #203482, October 2006

  • IDC White Paper sponsored by Microsoft, “Optimizing Infrastructure: The Relationship Between IT Labor Costs and Best Practices for Identity and Access Management with Active Directory,” Doc #204221, November 2006

  • IDC White Paper sponsored by Microsoft, “Optimizing Infrastructure: The Relationship Between IT labor Costs and Best Practices for Systems Management Server,” Doc #205110, January 2007

iv   Source: Return on Virtualization Case Study,

v   Source: Microsoft SoftGrid:

vi   Source: IDC Special Study, “Worldwide Server Virtualization Forecast 2006-2010,” Doc #07C5089, January 2007

vii   Source: About IBM mainframe virtualization:

viii   IDC White Paper sponsored by Microsoft, “Optimizing Infrastructure: The Relationship Between IT labor Costs and Best Practices for Managing the Windows Desktop,” Doc #203482, October 2006

ix   Source: The SoftGrid Impact -

x   IDC White Paper sponsored by Microsoft, “Optimizing Infrastructure: The Relationship Between IT labor Costs and Best Practices for Managing the Windows Desktop,” Doc #203482, October 2006


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