Bob Kelly, Microsoft's corporate vice president in charge of infrastructure server marketing, gave the morning keynote speech at Monday's "Get Virtualization" event in the US. The event had 1,000 attendees and kicks off a series of worldwide shows that may eventually have 175,000 attendees total. Kelly spoke to Computerworld about his company's virtualization efforts; excerpts from that interview follow.

First thing's first: Will any of the follow-up Seinfeld-Gates TV commercials include virtualization? Or more talk of churros and showers?

[Laughs.] If I have my opportunity, you bet. No, really, I don't think so. I think App-V is not soft and squishy enough.

The US economy is weak and IT budgets are being slashed. Is it realistic to expect users to spend money today on virtualization to save money in long run?

The economy is a little soft in the US. But the emerging markets are still growing very, very rapidly. [Europe, the Middle East and Africa] and [the Asia-Pacific region] are still growing well. Also, we typically see very rapid adoption of technologies that help save money and deliver agility in down markets. Customers have to find cost savings somewhere, and so technologies that help them are pretty critical. The licensing changes we've made in Windows really help. In the old days, when you bought Enterprise Edition of Windows, you had to buy a copy per box you virtualized. We've made a change to let you run four additional VMs at no additional cost. That's about a US$5,000-per-VM savings.

The desktop and server battlefields are very different. In one, VMware has an early lead. But the other is a fairly greenfield space. Compare and contrast your strategies.

First and foremost, we see virtualization as a key enabler that is across an entire infrastructure. In server virtualization, we will win because we are priced very effectively to drive volume. We are a third of the price of VMware. We also have a management strategy that goes broad and deep. In VMware, you can't see into the app that is being virtualized. In Windows and System Center, whether it's physical or virtual, it's one pane of glass.

On the desktop side, it is still very, very early. We're seeing lots of interest, but not a lot of adoption at this time. The critical enablers for us will be having the right licensing in Windows client; System Center to manage and deploy those all of those thousands of images; and App-V that allows you to consume apps in streamed fashion. So we have a very end-to-end and broad technology set. VMware is nowhere close on that front.

Virtualization analyst Brian Madden thinks application virtualization today needs to be used in conjunction with virtual machines. He argues that streaming to unmanaged desktop clients can result in application and driver conflicts -- and support headaches for app vendors.

I don't agree. The real advantage of app virtualization is that it virtualizes the registry. There is no reason why that registry, as a container, would impact the physical registry. We see app virtualization used in lots of ways, but the two most prevalent scenarios will be app streaming directly to rich client -- a PC with Windows installed on it -- or inside a VM.