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Desktop Virtualization Brokers Emerge: Page 3 of 4

"We kill about five birds with one stone," Brown says. He says, for example, that Kidaro's software can enable customers to avoid rewriting or requalifying XP applications after a move to Vista. "You can just wrap custom applications in XP machines in Kidaro and manage how they're deployed."

Brown won't say how many customers Kidaro has, and none have been named so far. But he claims there are financial services firms, media companies, and government agencies using or evaluating the startup's software, which was introduced earlier this year. (See Desktops Dive Into USBs.) The company has about 35 employees and has raised $14 million to date, including a round late in 2006. (See Kidaro Secures $10 Million.)

At least one analyst sees desktop virtualization products like Dunes's and Kidaro's as part of a larger move to create "virtual desktop workspace." According to senior analyst Rachel Chalmers of the 451 Group, author of a report on the topic released this month, customers are asking for desktop virtualization, leading to demand for its management. "One Wall Street Bank has found that maintaining software in Windows is so complicated that they must issue users a new PC every year," she says. "Keeping desktop configurations on a host and serving them over a network, particularly a LAN, can be very effective."

In a prepared statement on her recent report, Chalmers cites the complexity of weeding through solutions at this point. "The trouble is that approaches for desktop and application virtualization differ, and many are complementary, leading to tremendous market confusion as to which companies and technologies are competing head-to-head and which are building on one another."

Things are likely to get more, not less, complicated. One factor is the ongoing involvement of VMware, Microsoft, and other top players. VMware, for instance, is rumored to be working on its own broker for virtual desktops, via its acquisition of U.K. startup Propero.