SR: Exactly. Probably the best way to start would be to just reiterate what you described there in a little more detail. Obviously, you are well aware of machine virtualization and what that does. And that is, in effect, faking out an operating system to think that there’s real hardware there when in fact, there’s a virtual layer that represents the hardware.

What we do is make it so that when an application is running, it thinks that it’s installed to the operating system (but) it’s really seeing a virtual layer of configurations. Things like .DLL, DD files, fonts, and common objects. Applications think, “Cool, I’m installed, I’ll run,” but in fact, it’s running in a virtual layer.

Why is that important? When people roll out new apps, especially our customers; like Merrill, Mayo Clinic, Blue Cross Blue Shield, their biggest fear is – I’ve got this new application; I’m going to push it out to 1,000 or 5,000 desktops and I don’t know if I’m going to break something else on that machine because my installation will overwrite the settings or configurations that have been created by earlier applications.

So, by virtualizing that, we make it so that no app actually gets installed on that machine. And therefore, you don’t have to have that fear, when you roll out a new app or just an update, because the app itself keeps the machine clean. Many of our customers have transformed the way they manage their machines and their applications. Previously, they would assign a specific user, to a specific machine, by giving them a specific mix of applications. With our system, anybody can log on to any machine and have access to just their applications and they don’t have to worry that one app or a different users set of apps will conflict with that persons’ apps. The machines all become these generic machines that, in effect, just have Windows and a software client. And the software is delivered, in real time, through our stream protocol and runs in a virtualized manner so that no app conflicts with another. We went over the 500-user mark this past year, in 2005. Almost all our deployments are at least 1,000 seats, if not more.

SR: Large companies like this product. The more number of users, the larger number of apps, the more number of changes you have, the more you need us. Think about hospitals: (they) have hundreds of apps and they’re all built by different people and they all conflict with each other. Financial Services Companies: they need apps to be available the minute that person needs it because the trader out there is going to lose, literally, millions of dollars a minute, if their app isn’t up and running where they want to be. I was just talking with a financial institution; we were going over our calculator, (which) looks at these issues in detail. One of them, I asked, “How many changes do you do?” and they said, “Oh four to five a week.” Think about what that means; they had to do all this testing before they roll out an app; now they just virtualize the app and push it right out.

SR: Absolutely. Or being able to repurpose people to enable you to get to those projects you never could get done before. So, it’s a matter of being more responsive, making your customer’s apps work better. I think we are right at the point where people are beginning to realize that App Virtualization is as significant, if not even more significant, than machine virtualization, because it impacts everybody out there, not just the data center.

We are talking about hundreds of machines. As you look out onto the network, you realize that you’ve got thousands of desktops connected. And when those go down, it doesn’t just impact people inside the data center, it impacts your end users. With App Virtualization, you’re able to really get in there, and have a deep impact, not only on IT but also on your end users, making them a lot more productive. One of the things our Return on Virtualization Calculator looks at is, how much time does an end user have in terms of downtime when you are pushing out an app and actually installing it to that machine? They have to sit there and watch as a piece of software, or application, is installed remotely. With our software, that doesn’t happen. The applications are just available in real time.

SR: Yes. One thing that is very important to note is when an application is streamed-down, it’s not as if 100% of it is pushed over. You only need to push over like 15%.

SR: No, all apps can run; that’s not a problem. What I would say doesn’t work is if you are on a dial-up line. And we also make it so that when we package the app it can either get routed to your desktop or to a terminal server where it will screen scrape to you. That’s an alternative with our Zero Touch Front End product. It’s able to send information back to the server about your current situation. So, if you are on a low-bandwidth connection, it can actually, in real time, route the application to a terminal server and then have a screen scrape, which is of course, for low-bandwidth.

SR: Today, there aren’t the many clients for terminal services for LINUX, but certainly over time. The bottom line is, there’s a lot of talk about LINUX Desktop, but no one wants to pull anything right now, in any large scale.

SR: Sure. We’ve been at this for five years. It’s inevitable that people are going to want to look at the return on their investment so we sort of took a twist on that and began to take a calculator that we call “Return on Virtualization.” Obviously at the end of the day it’s about your Virtualization investment and what you get out of it. So we said, “First, we’re going to create a calculator that’s not one of those black boxes that you put in three numbers and it tells you, ‘hey, you’ve just saved ten million dollars.’” We wanted to make sure it was something that was very transparent.

So, we worked with Forrester Research, who has this group called TEI (Total Economic Impact) where they will help you create a calculator that meets their standards. “Secondly,” we said, “what do people want to figure out?” What we need to first do is show people what they are spending today. A lot of people don’t realize when they take an app and they deploy it, they don’t think about the fact that there is probably 15-20 steps they have to do to make sure that that app gets rolled out correctly. They have to image a system to create a test system, they have to figure out what apps are going to be rolled out as part of the new update or new deployment, and they have to test each app against each other to make sure that there are no conflicts or configuration problems. We worked with customers and we figured out that there are about 15-20 steps, depending on the customer and how aggressive they are. Then what we did is we put numbers against that. If you’ve got one app, how many minutes is it going to take for you to test that app?

Now, if you have, on average, fifteen apps, as part of a desktop, that means five minutes times fifteen. So, we’ve built a system where people could put in their inputs, like how many apps they’ve got, how many they update, how many they deploy, and how many they terminate. Then we compare it to whatever is given in terms of the time they use. So we’re looking at four major areas: deployments, updates, support and termination. We broke down all the steps for each of those. Then we built out the steps that we’ve seen out there with our 500 deployments around what it takes to get an app out using this upgrade. So, at the end of the day, people put these inputs in and what they get to see is not only their existing costs, they can see if it feels comfortable in terms of the numbers. Probably as important as seeing the savings, is seeing how many steps are eliminated in the whole process.

SR: That’s a good question. Each time you use an application, it checks to make sure you are license compliant and it records the user’s usage. So at the end of the day, the Administrator can do a report and actually see who used what app and for how long. So, it allows me to be a lot more license compliant than ever before. Because you know, in the installs world, when we install Word, I go over to your machine, and that’s it. I’ve lost all connection to it. You could go home and put it on your home box or whatever, I have no idea. I don’t even know if you are using it or not. What we are doing here is turning software into a network service. We’re enabling software to work like a webpage, a job app or whatever, but without re-writing the code.

SR: Here’s the important thing that you need to understand about our apps: when an app is running, it sees its virtual environment but it also sees and can read from the operating system it’s running on so we can retrieve data from the actually installed operating system. It can pull stuff from the registry, but when it starts to write to the registry, it will start to write to its virtual environment. So what does that mean for your question? When an app is running it is in, fact, on your machine. When you hit CTRL/ALT/DEL, you will see that app in there as a process and as an application. It sees the printers, it sees the network drivers, it sees any hardware device that’s plugged in there, so if you’ve got a dongle that you need to use to authenticate that machine, or that application, it will see that. Nothing will change. You can still cut and paste between virtualized data and an installed app.

SR: Yes. It’s this very careful balance between working with the local operating system and running on the local operating system and at the same time keeping it clean.

SR: Sure. A couple weeks ago we announced a very close partnership with Microsoft where we’ve taken all of the virtualization knowledge streaming and we have embedded it within their major software and operating systems deployment platform, called SMS, Systems Management Surfer. So, what we’ve done is made it so that people who have XMS Infrastructures, and by the way, there are literally millions of XMS out there, can take our platform and inject it within their existing infrastructure without having to make any changes. Except now they don’t have to PET their apps anymore, because they can either stream or push them using XMS and they can do all the asset management you and I talked about within XMS itself. But this is more than just a product announcement; this is a very close relationship between Softricity and the Microsoft field.