Microsoft and Citrix Systems announced an expanded alliance to deliver a comprehensive set of virtualization solutions to address the desktop and server virtualization needs of customers. The two companies will work together to deliver and market joint virtualization solutions with Windows Server 2008 to help customers achieve a flexible and dynamic client computing infrastructure.

Microsoft hasn’t disclosed what it paid for the venture-backed start-up and its compression technology though one analyst took a shot and figured it was less than $100 million. Calista is backed by Greylock Partners and Lightspeed Venture Partners and quotes IDC predicting desktops using virtualized client computing will hit around 40 million seats by 2011.

Meanwhile, Microsoft has also tightened the screws on its axis with its old friend Citrix, which is now supposed to develop a tool that blithely transfers VMs between the XenSource’s XenServer and Windows Server 2008 with Hyper-V for the sake of interoperability.

A test version of the tool is due next quarter and the final version when Hyper-V ships.

Of course VMware already does this via a free utility.

But Microsoft and Citrix are also supposed to co-market widgetry based on Windows Server 2008 and Windows Optimized Desktop extended, they said, with the XenDesktop and Citrix’ Presentation Server.

However unlikely, according to Microsoft insiders, Forbes speculates that Microsoft might eventually buy Citrix, which currently has a market cap of $6.4 billion.

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