Hoping to stay a step ahead of rival VMware, Citrix Systems is now shipping its XenDesktop product line of desktop virtualization software.

Announced Tuesday at the company's annual Citrix Synergy conference in Houston, XenDesktop comes in five editions, including a free bare-bones Express Edition that will give small businesses and developers a chance to test the product for as many as 10 users without having to worry about licensing fees.

XenDesktop delivers the Windows desktop to clients over the network, using virtual machine technology. These virtualized desktops are actually run on a central server, making it easier for them to be managed by IT staff.

After having a virtual monopoly on remote Windows desktop connection software, Citrix has been feeling some competitive heat lately from VMware. Analysts say VMware's Virtual Desktop Infrastructure is still a year or two away from providing stiff competition to Citrix, but the virtualization software vendor, which is majority-owned by EMC, clearly has Citrix's attention.

In October of last year, Citrix spent $500 million to acquire VMware competitor XenSource. XenDesktop uses Xen's hypervisor software, and Citrix has a data center product called XenServer that is based on XenSource's product.

Although XenDesktop takes a different approach from Citrix's older XenApp software (formerly known as Presentation Manager), it is a similar type of product. With XenApp, users are delivered applications, or even very basic Windows environments called published desktops, from a central server.

Published desktops are generic and cannot be easily customized for individual users. In contrast, XenDesktop gives the users a full-featured Windows environment, but one that can still be centrally managed by IT staff.

This will make XenDesktop appealing to many more desktop users in the enterprise, said David Roussain, Citrix's corporate vice president of virtualization marketing.

"We see that the desktop virtualization market is going to grow dramatically over the next five years," he said. "Enterprises need to find a way to dramatically lower the cost of delivering desktops in the corporation."

That need to centrally control desktops may appeal to very large companies that are worried about things such as desktop policy compliance, but smaller businesses will stick with Citrix's traditional products, which are widely used to give workers remote access to applications, said Roman Gruzdev, CEO of IT consultancy Sequentur, in Arlington, Virginia. "I mostly do small and medium businesses, and for them, I don't see how it's going to be an advantage to have XenDesktop."

Because it delivers a customized version of Windows, where things such as Windows DLLs (Dynamic Link Libraries) can be changed, XenDesktop will make it easier for some applications to run with XenApp. However, because the software is being run remotely, there will still be limitations. Graphics programs that use a lot of processor power may not work well in XenDesktop environments, for example.