What's Holding Back Application Virtualization?
I posted a rather knee-jerk thought on my personal blog about this, but I wanted to expound a bit here since the audience is a bit more serious (*a-hem*). 
It seems that everyone is buying up virtualization products and services like plywood at a hurricane sale. Microsoft snatched up Softricity and Kidaro. EMC/VMware grabbed Thinstall. Citrix nabbed Xen. Sun acquired Virtual Box. Oracle and RedHat jumped in, and well, it's a big bowl of virtual soup now. At this point, I would venture to say that if you own a company making virtualization products or services, and you haven't been acquired (or even courted) by a buyer, you need to wonder why.
So much virtualization is going on, yet all of it seems focused mostly on the "hypervisor" side of things. The base-level substrate approach to hosting multiple guest operating systems. Microsoft's Hyper-V, VMware ESX, Citrix Xen Server and so on. There are more every week it seems.
Application virtualization however, or "App-V" (which Microsoft seems to be making into its own trademark), is a much more refined focus on encapsulating just an application (or application suite in some cases) for all sorts of benefits. It's not really that new, so that's why I'm confused about why the big players in this market seem to be holding back on things.
The biggest obstacle comes down to cost. The pricing models are still too high. They're aimed exclusively at large enterprise customers. SMB's could absolutely benefit from this technology, but they don't even know about it because most of them don't (a) have Microsoft Software Assurance on all their desktops, or (b) don't hear anything out of VMware besides "ESX" and "Virtual Center". Only die-hard techies know about the other players like Altiris SVS, Sun, Oracle and Citrix (who also aims their marketing at enterprise customers).
Don't believe me? Go visit some law firms, doctor's offices, schools, and even municipal government IT staff people. Ask them what their thoughts are about ThinApp, or App-V (ok, SoftGrid), or SVS or XenApp. If you get even one of them who responds with complete understanding you're really lucky. Some will have heard about these products, but will not be really familiar with what they're about. Some won't even know the names.
I've seen many environments where the biggest desktop support pains involve application conflicts, local user rights (with regards to using certain legacy applications), installing upgrades, rolling back problematic updates and so on. Trying to tackle these issues with "traditional" solutions is a major pain. A MAJOR PAIN. I know. I work with software packaging and deployment all day. I would gladly trade Wise or InstallShield script debugging for SoftGrid (oops App-V) or ThinApp "sequencing" ANY DAY of the week. No comparison. And the results are equally as good: conflicts, user rights, upgrades, roll-backs, all are massively reduced when addressed properly by App-V solutions.
I've spent the better part of two weeks packaging ten separately CAD applications into a single package to deploy to 2000 users on a WAN using Wise Package Studio and Altiris. Painful. Writing so much scripting code and hassling with pre-requisite items like .NET, MSXML, SQL Express, WSE, etc. etc. And almost half the code is dealing with detecting and ripping out older versions of each product in the package. I won't even attempt to rationalize the logic behind bundling so many apps in one package because it's not my call to make. Doing this with Thinstall or App-V for example would have eliminated half the work and more than half of the issues we're trying to solve in the end. Alas, that golden pot of fun isn't in our arsenal and not on the table either. MSI packaging it is; and will be as long as I can tell.
So, again, I pose the question: Why are the vendors ignoring smaller customers? Why are they making this technology so unreachable? Why do the vendor reps spend so much time marketing the hypervisor stuff and rarely even mention the app-v stuff? Weird. It's just weird.