Muglia penned an executive e-mail: “Harnessing the Power of Virtualization for Dynamic IT,” which was sent Jan. 21 to customers, partners in the industry and others who have signed up to receive these periodic e-mails from company executives.

Muglia is giving the opening keynote at the company’s Virtualization Deployment Summit in Bellevue, Wash., Jan. 22, which is being attended by more than 300 of its customers, testers and technology adoption partners and where he will deliver his message.

To help customers achieve business success without the IT complexity, Microsoft is focusing on innovation that enables companies to build flexible, intelligent systems that can automatically adjust to changing business conditions by aligning computing resources with strategic objectives, known as Dynamic IT, Muglia wrote in the e-mail.

One of the core components of that is virtualization, which provides powerful new tools for creating more efficient, flexible and cost-effective IT systems.

But for Muglia, the real power of virtualization comes when companies implement an integrated virtualization strategy that extends across their IT infrastructures.

“It is the combination of virtualization technologies running across computing layers and orchestrated by a single set of management tools that provides the foundation for Dynamic IT,” he wrote in his e-mail.

Microsoft’s ultimate goal is to try to ensure it becomes the leader in the provision of Dynamic IT all the way from the desktop to the server and into the data center, and that its solutions are pervasive and ubiquitous.

But the software maker has some serious ground to make up as the server distributions from leading Linux vendors SUSE and Red Hat already have server distributions with an integrated hypervisor in the market, while VMware is the dominant player in this space and unlikely to cede that title without a battle.

The war of words between Microsoft and VMware has been heating up recently, with the software giant telling eWEEK that it wanted a bigger slice of VMware’s pie, and VMware dismissively saying that while Microsoft's working on Hyper-V, it is innovating and extending its lead in the virtualization space.

Virtualization isolates the different layers—hardware, software, data, networks, storage—from each other, Muglia said, before touting Microsoft’s offerings in this space.

Server virtualization will be possible with Microsoft’s upcoming Windows Server 2008 software, due to ship next month, along with its Hyper-V hypervisor, which will be available within six months of that.

Its Virtual PC product runs applications that are not compatible with the operating system on a desktop PC by supporting multiple operating systems on a single machine, Muglia said.

Microsoft’s SoftGrid Application Virtualization product turns applications into centrally managed virtual services that are streamed to desktops, servers, and laptops when and where they are needed, he said, while Microsoft’s Windows Server Terminal Services enables an application on a computer in one location to be controlled by a computer in another.

Storage virtualization lets users access applications and data without having to worry about where they are stored, while network virtualization allows remote users to tap into a company network as if they were physically connected.

Muglia also pointed out that less than 10 percent of servers are currently virtualized, despite that IBM introduced virtual machine technology for mainframe computers in the early 1960s.

“Microsoft Windows NT included a virtual DOS machine. Virtual PC was introduced by Connectix in 1997, and Microsoft acquired Connectix in 2003, while EMC’s VMware introduced its first product, VMware Workstation, in 1999. Softricity introduced SoftGrid, the first application virtualization product, in 2001, and we bought it five years later,” he said.

But an ever-growing number of products now target high-volume, low-cost hardware, and customers use server virtualization to save money by consolidating the workload of several servers onto a single machine.

“At Microsoft, we believe that in the coming years, server virtualization will become ubiquitous. Adoption of other forms of virtualization is just beginning, too, and their potential value remains largely untapped,” Muglia said.