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 Washington.

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 virtualisation efforts; excerpts from that interview follow.

First thing's first: Will any of the follow-up Seinfeld-Gates TV commercials include virtualisation? 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 economy is weak and IT budgets are being slashed. Is it realistic to expect users to spend money today on virtualisation 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 virtualised. 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 virtualisation as a key enabler that is across an entire infrastructure. In server virtualisation, 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 virtualised. 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.

Virtualisation analyst Brian Madden thinks application virtualisation 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 virtualisation is that it virtualises the registry. There is no reason why that registry, as a container, would impact the physical registry. We see app virtualisation 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.

Is it realistic that you'll be able to convince a customer who has already implemented VMware on the server side to take on your desktop/app virtualisation solutions?

We will have interoperability with existing VMware environments. And over time, you will see us start to migrate those customers over to Hyper-V for two reasons. One, with System Center, you can manage physical and virtual environments. Second, VMware is ridiculously expensive. We are at a third of the price. So we think customers will deploy us side by side with VMware, and then, because of the price, you'll see customers move to us.

Can implementing virtualisation inadvertently cause users' environments to become less secure or less stable?

It's not a security issue. It can be stability. Customers are deploying server virtualisation because of unmanaged server sprawl. Virtual machine sprawl is just as bad. It can have an adverse effect unless the customer has a very strong management strategy. That is why we've invested so heavily in System Center.

You have a certification program for third-party apps running with Hyper-V. Will you create a similar one for App-V? We don't have any plans, and I don't see why we would, actually. There's nothing you need to [do] but sequence your application. It's really the same as building an MSI package.

How do you change the perception that virtual desktops and app streaming are only for companies that want to tightly control their employees' IT usage?

[Laughs.] That is a political problem and not ours. But really, it's not about control, it's about management benefits. For instance, App-V can enable your apps to be rolled out more easily.

With your emphasis on virtualisation, what is the future of Terminal Services?

Terminal Services is growing rapidly for us. We'll see it side-by-side with App-V. It's not a question of us wanting to move a customer a certain way; it's a matter of providing choice to the customer.