Virtualization encapsulates a complete, running system environment into a file. How will that affect how software is distributed and installed? It's definitely going to have a big impact. You can see that already with people shipping virtual machines around which have all of the software fully installed to run a service. You can take this collection of bits, and all you do is drop it on a virtualization layer, and suddenly it's a working service. It's a fundamentally different paradigm for distributing software because you no longer buy this software package and prepare the machines for it and install the operating system and applications on it. Looking forward, if you want a service, you'll go grab some bits from a provider you trust, drop it into your virtual environment and suddenly have a service running.
Products such as desktop streaming tools, and thin-client software such as Microsoft Terminal Services, are abstracting the PC hardware from where software resides and where it runs. How will that affect the future of the PC? That's a fascinating question. PCs just sort of took over the enterprise but also caused a tremendous pain point in managing these things. That pain point is high enough -- especially with the security attacks people deal with -- that people are looking at better ways of managing PCs.
Certainly, you can look at the different approaches. Terminal Services says, "OK, we're going back to our centralized facility where everything runs, and we use technology to push displays to the desktop." Softricity says, "We'll have an operating system running [on the desktop] but rather than having direct applications running on it, we'll allow them to dynamically download and run the applications." VMware ACE is yet another one where you build a virtual machine with a desktop environment, and you send it to someone, and they can run it on their desktop PC in a controlled environment.
They all solve some problems, but they all have weaknesses. In the next couple of years, we'll see players pushing hard for remote desktops using remote display protocols and other approaches for attacking this problem.
Today, the operating system is at the center of things. With virtualization schemes appearing above and below it, is the role of the operating system changing? The virtualization layer takes away some of the functionality that the operating system was performing. For apps that are written against a particular API, like Win32, you'll still need the operating system code there. When you start talking about running in language environments like Java and WebSphere, there is a question of what you do with the operating system. It is a pretty large piece of middleware now in a virtualized world.