Microsoft on Monday in the United States updated its plans for new virtualisation software and said it will expand its lineup through an acquisition.

The company will begin testing its hypervisor software, developed under the code name Viridian, by year's end, Bob Muglia, senior vice president of Microsoft's Server and Tools business, told ZDNet Australia sister site CNET News.com. The software will ship within six months of Longhorn Server, the next major release of the company's server operating system, due in the second half of next year.

Microsoft had earlier indicated that Viridian would ship much later than Longhorn Server. Muglia said the software was always intended to ship in the "Longhorn time frame, but nobody knew what that meant. We're now saying within 180 days of Longhorn Server, and we'll know more as it enters beta testing," he said.

Microsoft is also developing software to manage virtualised systems, Muglia said. Microsoft System Center Virtual Machine Manager, developed under the code name Carmine, will enter beta testing within 90 days. The software, which will work with Microsoft's overall systems management tools, is also slated to debut in the second half of 2007.

The software maker said it has acquired Softricity, a Boston-based software maker, to extend its reach into application virtualisation. Microsoft's current virtualisation software is designed to run multiple instances of Windows simultaneously. Softricity's tools let companies virtualise applications that run on Windows, such as Microsoft Office or other business applications, so that programs can be managed centrally and delivered over a network to desktop machines.

Details of the acquisition were not disclosed. The company will remain in Boston, Muglia said. Softricity employs around 120 people.

Muglia said the company has not determined how Softricity's products will be integrated into Windows. However, "it's fair to say that some pieces of the technology will be integrated into multiple Microsoft products," Muglia said.

Virtualisation, which today generally refers to the ability to run multiple operating systems simultaneously to make a computer more efficient, is a hot area and one in which Microsoft lags rivals. Even as Intel and Advanced Micro Devices add virtualisation hardware support to make the technology mainstream, market leader VMware is exerting price pressure on Microsoft while the Xen project is giving rival Linux a major lead over Windows.

Microsoft is expected to demonstrate its virtualisation software on Tuesday at its Windows Hardware Engineering Conference, taking place this week in Seattle.

The company is also expected to release updated test versions of Windows Vista, Office 2007 and Longhorn Server.