The latest in a spate of deals for virtualization startups is Microsoft Corp.'s [MSFT] acquisition of Kidaro Ltd., an Israeli developer of desktop virtualization software for enterprises. A source close to the deal pegged the value at about $100 million.

Storm Ventures partner Ryan Floyd, who invested in Kidaro in 2005, wouldn't discuss the dollar value of the deal, but confirmed that Storm received a healthy exit on a company it was not actively shopping. Israeli firm Genesis Partners was the co-leader of Kidaro's $4 million first round alongside Storm, while Opus Capital led a $10 million round announced in December 2006.

VMware Inc. [VMW], which competes with Microsoft on the virtualization front, acquired Thinstall Inc. for an undisclosed amount in January. Floyd said Thinstall is more geared toward application virtualization than providing access to the entire desktop, as Kidaro seeks to do. Rather than providing virtualization on the server side, as Citrix Systems Inc. [CTXS] does, Kidaro hosts its software on the client PC or notebook, he said.

Microsoft, which also acquired virtualization software maker Softricity Inc. in 2006, said it would integrate Kidaro's products into its desktop optimization pack for software assurance once the deals closes. -- Paul Bonanos

See March 12 press release from Microsoft
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