Boston: Citrix Systems Inc., a global leader in application delivery infrastructure, on Monday announced 'Project Encore', extending its collaboration with Microsoft into the adjacent server virtualisation market.

As part of this strategic alliance, Citrix's new solution called 'Citrix Essentials' will be available for Microsoft Hyper-V, offering advanced virtualisation management capabilities for Microsoft Windows Server 2008 Hyper-V. This will help customers create highly scalable, manageable and agile virtual infrastructures.

Citrix Essentials' pact with Microsoft reflects Citrix's intention to position the company as the main challenger to market leader VMware.

The new solution will extend the enterprise management capabilities of Windows Server 2008 Hyper-V and System Center in the areas of storage management, provisioning services, and lab automation.  To accelerate broad availability to Microsoft Hyper-V customers, Citrix will make Essentials for Microsoft Hyper-V available to both Citrix and Microsoft resellers worldwide and collaborate with Microsoft on marketing and training activities.

''Citrix Essentials for Hyper-V will enable Microsoft customers to obtain even more value from their investments in the Windows platform and Microsoft virtualisation solutions,'' said Mike Neil, general manager, virtualisation strategy at Microsoft Corp.

''We see Citrix Essentials as a powerful extension that enables customers to accelerate their Hyper-V adoption in the enterprise in much the same way Citrix XenApp has extended the Windows Server platform for nearly 20 years in the application delivery arena.  Microsoft also will work to ensure that a future release of Microsoft System Center will support Citrix XenServer for customers with mixed Hyper-V and XenServer environments,'' he continued.

Citrix Essentials provides customers with a powerful set of advanced virtualisation management capabilities that extend the enterprise management capabilities of Hyper-V and System Center to help make virtualised environments more scalable, more manageable and more agile.

Citrix Essentials for Hyper-V includes special features such as advanced storage integration using Citrix StorageLink technology, dynamic provisioning services, hypervisor interoperability, and automated lab management.

''Citrix and Microsoft have a long track record of working together to add value on top of the Windows platform,'' said Frank Artale, Citrix Systems' group vice president, worldwide business development.

''Our partnership on the client side has improved desktop computing for 200,000 companies and more than 100 million end users worldwide. We are excited to officially extend this partnership into the server virtualisation arena today, opening the next chapter in one of the most successful partnerships in industry history,'' he added pointing at the 20-year relationship between the two software companies.

Citrix Essentials for Hyper-V will be available through channel partners from April 7, 2009. Suggested retail pricing for the product will begin at $1,500 per physical server. Microsoft Hyper-V is currently available as part of Windows Server 2008 Standard, Enterprise, and Datacenter editions, as well as a standalone hypervisor Microsoft Hyper-V Server 2008.

Earlier, Citrix announced its decision to offer free licenses for XenServer, which is available in Express, Enterprise and Platinum editions.

''The Enterprise Edition becomes free; complete virtualisation standard platform is free - free to download and deploy, with free resource pooling,'' Simon Crosby, CTO of Citrix, stated.

He also said Citrix has no plans to open-source its XenServer product, which will now be supported by Microsoft System Center.

Now in production in more than 5,000 enterprise datacenters worldwide, XenServer is a key component of the Citrix family, a comprehensive datacenter-to-desktop system that helps customers transform static datacenters into dynamic 'delivery centers'.

Since its acquisition of XenSource in October 2007, Citrix has been making aggressive forays into the virtualisation market as it looks to compete with the likes of VMware, which still owns the lion's share of the market.

Both companies are still looking up at VMware, which is expected to unveil new products at VMworld Europe 2009, which opens today at Cannes, France.

In January Citrix and Intel joined hands for combining Intel's vPro with Citrix virtualisation techmology, including XenDesktop.

Citrix then followed up on February 4 with the release of XenDesktop 3 virtualisation software designed to handle both streamed and hosted desktops.

Citrix Systems is a global leader in application delivery Infrastructure with annual revenue of $1.6 billion in 2008.

More than 215,000 organisations worldwide rely on Citrix to deliver any application to users anywhere. Citrix customers include 100 per cent of the Fortune 100 companies and 99 per cent of the Fortune Global 500. Citrix has approximately 8,000 partners in more than 100 countries.