The hotly competitive virtualization market has a new entrant, with ClearCube today spinning off its software business as a separate company, called VDIworks.

Austin, Texas-based ClearCube, a player in centralized desktop solutions based around its PC blades, will continue its core offerings -- although it now will be licensing VDIworks software, becoming its first OEM partner.

Rick Hoffman, ClearCube's former president, will now serve as president of VDIworks, while Randy Printz takes over as president and CEO of ClearCube. Printz had been the company's chief operating officer.

Hoffman said the company began considering a spin-off of its software operations two years ago, and started working toward that goal in late 2007 after receiving additional funding. VDIworks also received seed funding from ClearCube's original investors.

"Customers won't see a change," Hoffman told InternetNews.com. "ClearCube will continue to supply hardware on the front end and central services. However, the spin-off enables VDIworks to focus on what it needs to do to differentiate and compete in the white-hot market for desktop virtualization."

With the change, Hoffman said VDIworks will push for licensing deals with former competitors like HP and Wyse.

"We know software is a key differentiator inside a centralized environment," Hoffman said.

ClearCube already had deals in place with other virtualization companies. Last year, the firm signed a licensing deal to sell VMware's Virtual Desktop Infrastructure (VDI).

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VDIworks' software is designed to help IT managers centrally create, deploy and manage virtual desktop infrastructure. The company said its technology is built on more than 20 patents.

Industry analyst Dan Kusnetzky said ClearCube has been one of the market leaders in centralized desktop computing and the spin-off brings its VDI management software "out of the shadows of its seasoned hardware."

Kusnetzky said in a statement that the deal "will finally shine a spotlight on its comprehensive software platform for managing high-performance desktop virtualization, while enabling ClearCube the flexibility to focus on delivering its end-to-end solution for high-end centralized desktop computing."