Citrix said it plans to adopt VHD as the common runtime environment for virtualized operating systems and applications in future versions of its Desktop Server. Microsoft, on the other hand, plans to eventually incorporate the format in the company's SoftGrid Application Virtualization for both the desktop and Terminal Services.

The partners also have agreed to collaborate on emerging virtualization technologies and virtual infrastructure management tools. "By standardizing on a common virtualization format for both operating systems and applications, Microsoft and Citrix will enable customers to run interoperable solutions that can be centrally managed using our technologies," Mike Neil, general manager of virtualization strategy at Microsoft, said in a statement released at the VMworld conference in San Francisco.

Microsoft offers a suite of products for virtualization of desktops, which is the process of running desktops and applications on a server and making them accessible through a PC or thin client. Citrix provides infrastructure technology for delivering applications over a network.

Citrix, which announced last month its intention to acquire virtual infrastructure vendor XenSource, plans to extend support for the VHD format to include operating system streaming to both servers and desktops. XenSource supports VHD as its native runtime format for virtual machines.

"Agreement on VHD is a necessary first step we are taking to ensure IT can rapidly adopt the full benefits of virtualization," Wes Wasson, VP of worldwide marketing at Citrix, said in a joint statement with Microsoft. "Today's announcement signals our continuing, joint commitment with Microsoft to provide virtualization solutions to create and manage dynamic IT environments well into the future."

Microsoft's VHD format has been available under its "Open Specification Promise" since October 2006. Patented technology offered under OSP is available at no charge and with no restrictions. The VHD format captures the virtual machine operating system and the application stack in a single file.