Microsoft is buying enterprise desktop virtualization start-up Kidaro Inc, intending to combine its technology with its own suite of desktop management tools, the Microsoft Desktop Optimization Pack for Software Assurance, so its biggest customers can deploy and manage virtual PCs.

Terms were not disclosed but the three-year-old Kidaro raised about $24 million from Genesis Partners, Storm Ventures and Opus Capital Ventures.

Kidaro leverages either Microsoft's or VMware's virtualization as a virtualization engine and creates a corporate-controlled workspace on existing PCs and laptops that's completely mobile and requires no server farms.

It's a form of what they call client-based virtualization, which means it runs locally on the PC. In Kidaro's case it's client-hosted and so supports mobile users and disconnected use.

The virtualization is supposed to be invisible to the end user, secured by strong encryption and policy enforcement and centrally provisioned and managed. It encapsulates the entire desktop - operating system, applications, tools and data - and can be delivered by DVD, the network or a USB flash drive or iPod. It can also de-duplicate and not send the OS along.

Kidaro's security apparently answers VMware's Assured Computing Environment (ACE) in adding policy and authentication.

The start-up offers what it calls a "self-cleaning" virtual desktop, meaning that users can personalize their setting and files, while the operating systems and applications are continually repaired and updated and so the virtual desktop reverts to a stable, patched, corporate-approved state at the beginning of every session.

It says it discards configuration errors, unwanted software and malware from the previous session. One golden VM image is used and updated enterprise-wide, with different sets of applications available.

Microsoft said it expected the widgetry to accelerate Vista migrations by minimizing compatibility issues between applications and the operating system; enable rapid reconstitution of corporate desktops; minimize the tension between IT control and user flexibility by applying policies in locked-down corporate virtual PCs while giving users more open access to the underlying OS; speed user adoption of desktop virtualization by making virtual PCs invisible to end users; and reduce IT investment in desktop image management by delivering virtual images independent of hardware or local desktop configurations.

Since the middle of last year Kidaro has been run by Kevin Brown. He was part of the original management team at the storage security firm, Decru, which went to NetApp for $272 million, and was a co-founder of Inktomi.

Kidaro's widgetry has been selling for $125 a seat, down from $250.