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Virtualization may well be considered non-sexy in some parts , VMWare’s announcement that it is set to acquire Thinstall , a San Francisco-based desktop virtualization technology provider, should be able to change that view. Bringing virtualization to the desktop is a natural evolution that is destined to become a huge opportunity in a thriving market, and Thinstall’s remarkable progress over the past few years have obviously captured the attention of the 30,6 billion $ gorilla, who made the acquisition move for an undisclosed amount.

When you install a Windows program or an upgrade of a previously installed program on your PC, it messes with just about everything, including the registry that stores all of the settings, options, and configuration files for the Windows OS. That, in turn, opens up opportunities for security breaches and vastly increases other headaches for the IT staff who have to deploy software in organizations with lots of PCs. It all makes the idea of software-as-a-service—serving up applications on-demand over corporate networks or the web— look quite appealing. But if companies could give their employees a way to run traditional desktop programs like MS Word and PowerPoint over a corporate network without actually having to install them, they could keep using these powerful programs with less hassle—and might not be so tempted by web-based alternatives like Google Docs.

That’s exactly what Thinstall allows. Using its system, companies can create special, compact Thinstall versions of programs like PowerPoint. When a worker accesses one of these executable files over a network, it loads within a virtual operating system that communicates with the resident operating system, but doesn’t modify it in any way. A “thinstalled” application runs in “user mode” only, meaning that the user can start it, but can’t fiddle with the machine’s other settings.

For VMware, this deal pushes them deeper into the software side of virtualization, which is a good thing considering the company’s dominant market share on the server side. To feed that huge market cap, VMware needs to grow. That’s exactly what makes buying Thinstall, an application virtualization product much similar to Microsoft SoftGrid, Citrix’s Application Streaming, or Symantec / Altiris’s SVS technology, a very logical step. The move also follows on the heels of VMware’s purchase of small independent software integrator Propero . The company will likely make additional buys to stay ahead of its competition.

For additional analysis, you might want to give The Brian Madden Company‘s piece a good read.

VMware also disclosed its acquisition of services-related assets from Foedus , a Portsmouth, New Hampshire-based provider of virtualization technologies and services. From the press release:

VMware intends to leverage Foedus’s application and desktop virtualization services expertise to help VMware partners expand their virtualization services business.  Foedus’s remaining assets, including the company’s sales and marketing organizations, were acquired earlier this month by GreenPages Technology, a national, consultative IT solutions provider and VMware Authorized Consultant (VAC) partner.