Austin, Texas-based ClearCube announced today that its desktop virtualization software business is being spun-off into its own company, VDIworks.

VDIworks will provide the VDIworks Sentral Virtual Desktop Platform for desktop computing and virtual desktop management, which includes connection brokering, virtual machine, host and thin client management, load balancing, health and asset monitoring, inventory management, disaster recovery and support for back-end hardware and user access devices.

ClearCube will continue providing desktop computing products, including desktop virtualization software, PC Blades and thin client terminal servers.

VDIworks and ClearCube will operate seperately but under an OEM agreement whereby ClearCube will continue to market and promote the VDIworks software under the Sentral VDI Management Software brand, and the Sentral management software will still be part of ClearCube’s centralized desktop computing offerings. ClearCube customers will still get support in their current license agreements with ClearCube, and VDIworks will add OEM relationships with third-party vendors, said Rick Hoffman, former president of ClearCube and now president of VDIworks.

“Users should not notice any changes, because the support, features, benefits, etc. will all be the same,” said Hoffman.

VDIworks will receive seed funding from current ClearCube investors and will seek additional funding to support growth. About 35 research and development employees in the U.S. and Pakistan will also move to VDIworks.

Because ClearCube’s Chief Executive Officer is taking over VDIworks, ClearCube’s Chief Operating Officer Randy Printz has been promoted to president and CEO. Rick Hoffman will be joined on the VDIworks side by Chief Technology Officer Amir Husain.

Desktop virtualization is a popular vendor offering right now, with companies such as Sun Microsystems Inc., Citrix., Pano Logic Inc. and VMware Inc all offering a flavor of desktop virtualization, but users report hesitation in using it due to cost.

PC blade manufacturer ClearCube has become the first non-server vendor to OEM VMware’s ESX hypervisor, which it will sell to customers implementing virtual desktop infrastructure (VDI).

As indicated in an article this April, ClearCube will sell ESX on a per user basis, rather than per host. This makes it cost-effective to run fewer virtual desktop sessions per blade, explained Tom Josefy, ClearCube director of product management. With this arrangement, IT managers can “guarantee a great end user experience but don’t need to have 30+ users per server to amortize the cost of ESX,” he said.

Josefy said ClearCube expects customers to be able to run up to about 12 VDI sessions on one of its R2200 PC blades, for a list of about $250 per seat including support. “At higher numbers it’s at least a 50% reduction in cost per seat,” he said.

Josefy also weighed in on Microsoft licensing for virtual desktops. Thus far, two licensing models have emerged. With Windows XP, the EULA requires each user to have a “unique set of bits” in the form of a full packaged product, he said. Microsoft’s Vista Enterprise Centralized Desktop (VECD) model, on the other hand, charges “per access device, per year” and is only available to Microsoft Software Assurance customers, typically large enterprises.

Small companies, Josefy said, “will like the Windows XP full packaged product,” even though “they do have to worry about when XP goes end of life.” Large companies, on the other hand, “are looking at the [VECD] program because it’s simple [for them,]” he said.

Of course, VECD requires that they move to Vista, which in ClearCube’s testing, has been shown to consume more resources. How much more? Josefy couldn’t say yet. “I don’t know it it’s a 10% penalty, a 20% penalty, or what.”