At a live event in San Francisco today, virtualization giant VMware unveiled what it called a “monster” of a cloud infrastructure suite, upgrading its flagship VMware vSphere, even as rival Citrix forked over more than $200 million for Silicon Valley’s Cloud.com to better compete in the cloud computing arena.

The Citrix purchase of Cloud.com gives it CloudStack, its best known product, which is a way to build open private and public cloud computing systems. It put the Florida-based company in increased competition with VMware, as well as Amazon and Microsoft.

In related news, at its partners conference in Los Angeles today, Microsoft also stressed its private and public cloud computing solutions, unveiling a wide range of updates and features to its Windows Azure and other cloud offerings.

The competition in the space is certainly heating up as several rivals compete to become the key provider of technology and management in the cloud, as companies increasingly move their business operations there.

VMware’s strategy is to go bigger and stronger, with what it is billing as the most complete cloud package for users, touting more power, performance and scale in its vSphere 5 product.

The Palo Alto, Calif.-based company said it has simplified its offering, which is the first big update to its cloud operating system since mid-2009.

All of it is about making companies more comfortable with moving completely to the cloud, which is still the biggest obstacle for a range of issues, including worries about security and, well, simple confusion.

VMware said vSphere 5 and its updated cloud infrastructure suite is expected to be available in the third quarter.

“The market has fully embraced virtualization as a key transformative technology at the heart of the next era of computing,” said VMware CEO Paul Maritz, in a statement. “With vSphere 5 and our cloud infrastructure suite, VMware is helping customers accelerate towards more efficient and automated cloud infrastructure, redefining how resources are managed and secured, and ultimately, driving a more productive relationship between IT and the businesses they serve.”

At a Q&A later, Maritz acknowledged the increasing competition, specifically pointing to Microsoft, where he once worked.

“They have been predicting our death for five years now,” he said, noting that has not come to pass. “That said, they still haven’t given up either.”

Levine is the third partner to join AH in recent months. In January it named HP and Opsware veteran Mark Cranney as a partner for market development. And in March it added IronPort’s Scott Weiss.

“Adding Peter makes us smarter at the firm on a certain class of products where he is much more experienced and goes much more in depth than we do, in areas like virtualization and storage,” AH co-founder Ben Horowitz told me. A key area of expertise is one that Levine developed specifically at Veritas, he said, that of working with manufacturers of infrastructure products. “Veritas was probably the most successful company in the history of enterprise software at the OEM model except for Microsoft,” Horowitz said. “It’s a very complicated thing to do–and a very complicated thing to do correctly–so he brings a specialized skill set to the table.”

Horowitz also said Levine will help AH expand its reach and find deals in places where it hasn’t had a presence before, places like the Massachusetts Institute of Technology where Levine is a lecturer. One example: Bromium, a stealth startup that AH says it is investing in. While Horowitz didn’t disclose the amount the firm is investing, he did describe Bromium as a “security plus virtualization company.”

“It’s the kind of deal we wouldn’t have known about without working with Peter,” Horowitz told me.

“We’re at the second generation of what you can do with virtualization,” Levine told me. “Companies like Citrix and XenSource did a lot of the hard rock-breaking to get chipset support from companies like Intel to support virtualization, and once they did that there was an opportunity to take virtualization to the next level. Bromium is a company that takes advantage of all that.”

Levine is continuing in his role as a vice president of Strategic Development at Citrix and will continue teaching a class on Technology Sales at MIT’s Sloan School of Management. Previously, he was senior vice president and general manager of the Data Center and Cloud Division at Citrix, having joined that company in 2007 by way of its $500 million acquisition of XenSource, a provider of open-source virtualization sofware, where he was CEO. XenSource’s customers included Microsoft, Symantec, HP, NEC and Dell.

This will be Levine’s second go in the venture capital ring. He spent three years as a general partner at the Mayfield Fund and in that capacity served on the board of Consera Software, which was purchased by HP. He sat on the advisory board of VMWare and was an investor in Actona, which was ultimately acquired by Cisco Systems.

Levine first rose to prominence as an early employee of Veritas Software, and during his 11-year stint there helped to grow it to 5,000+ and more than $1.5B in annual revenue. His last job at Veritas was executive VP, where he was responsible for worldwide marketing, OEM sales, business development and several product divisions. Before that, he was a software engineer at MIT and worked on Project Athena, an early-1980s research project to build a campus-wide distributed computing network that turned out to be a forerunner of the kind of corporate networks we now use every day.

The move comes hot on the heels of Rackspace’s acquisition of OpenStack specialist Anso Labs, which NewEnterprise reported exclusively last month. Rackspace is calling the new unit Rackspace Cloud Builders, and will offer training and certification, deployment and support to companies that want to build and maintain their own cloud running OpenStack. Jesse Andrews, co-founder of Anso Labs, has the title of director of development in the new business unit.

Rackspace is just one of a batch of companies backing the OpenStack movement; Dell and Citrix are also big supporters. Dell has created an OpenStack installer that can be used to get the software up on a set of servers, and once field tests are completed, it’s expected to be offered to the open-source community.

The news here is for companies that have been looking on jealously at all those taking advantage of the public cloud, but that for whatever reason aren’t willing or able to do so themselves. OpenStack offers a way to easily build a private cloud that, depending on its structure, offers at least some of the advantages, like ease of of setup, without some of the perceived drawbacks, like a loss of control over data.

Meanwhile, the speculation around Rackspace and whether or not it’s going to be acquired continues unabated. Its shares have improved by nearly 20 percent since the first of year. It’s certainly not behaving like a company that expects to be acquired. Earlier this week it disclosed in an SEC filing a new 15-year lease on more than 21,000 square feet of data center space capable of maintaining a maximum critical load of nearly four megawatts of power, ready for occupancy by February. Combining that with the cancellation of a lease on a smaller facility, the deal is worth $88 million. Maybe when CEO Lanham Napier said the company is not for sale, he really meant it.

Morgan Stanley recently surveyed 50 enterprise CIOs about current and future tablet deployments and came back with some pretty astonishing findings: 21 percent of them are already purchasing tablets for employees and 51 percent expect to begin doing so in the coming year. In total, 67 percent of the CIOs surveyed said they’re either planning to deploy tablets or provide support for employee-owned ones this year. Now the scope of these deployments remains to be seen, but the fact that so many are being budgeted suggests the tablet is gaining meaningful traction in enterprise.

And if you’re dubious of that claim, consider this: Pads accounted for 29 percent of new enterprise activations of Good Technology software in December 2010, up from 25 percent the month prior. Clearly, there’s growing corporate interest in the tablet, which means there are growing opportunities for companies that provide enterprise software solutions for it–mobile security vendors like Check Point, desktop virtualization companies like VMware and cloud-based applications outfits like Salesforce.com.

Anso Labs is helmed by Jesse Andrews, the former lead architect at Flock, the Web-browser company that was recently acquired by Zynga, and Soo Choi, a former exec at Booz Allen Hamilton. Anso Labs is best known for its work on the cloud computing front with NASA, the U.S. space agency.

The move takes place against the backdrop of a surge in consolidation in the cloud computing and data center business. Last week, Time Warner Cable dropped $230 million for NaviSite. And on Jan. 28, Verizon acquired Terremark for $1.4 billion. That one-two punch in data center deal-making has led to persistent speculation that other data center companies, Rackspace among them, will be rolled up by larger companies–like Hewlett-Packard, Dell or Cisco Systems–that are eager to add cloud services to their portfolio.

Ask Rackspace executives about this–and I have–and they’ll tell you they’re not thinking about that. Rather than being rolled up by someone else, they’re focused on rolling up the assets they want to grow, and to remain independent. Late last year Rackspace acquired Cloudkick, a start-up focused on building cloud monitoring tools.

Rackspace did $629 million in revenue in 2009, and is expected to show annual sales of about $775 million when it reports fourth-quarter earnings tomorrow. It has 100,000 customers, and while many of them are small- and medium-size businesses, larger enterprise customers like Coca-Cola, Target and Vodaphone are tapping Rackspace for Web hosting and to run their cloud applications.

Rackspace wants Anso Labs for its expertise and devotion to OpenStack, an open-source cloud computing software project backed by Rackspace, Dell, Citrix, Cisco and Canonical, the company behind the Ubuntu flavor of Linux.

Rackspace wants to create a bunch of inter-operable cloud services so that customers can move workload from one cloud service provider to another at will, giving them increased flexibility. It’s comparable in some ways to vCloud from VMware and Eucalyptus.

PocketCloud is one of a number of programs that let people remotely access a PC or Mac from their iPad or iPod, thereby accessing files or even running full-blown applications that wouldn’t otherwise work on a mobile device. The company originally hoped to sell 100,000 copies, but now expects 2010 sales to be triple that amount.

So with sales so strong, just why would Wyse want to start giving it away?

“We want more people to download it and see the dream themselves,” CEO Tarkan Maner told Mobilized in an interview on Wednesday.

You see, it turns out that a lot of people don’t really think hip mobile applications when they think about Wyse, a company that specializes in the rather obscure world of thin clients.

“People usually do not associate the brand with something this cool,” Maner said.

But things like iPad apps are an increasingly important part of what Wyse does these days. Although PocketCloud’s roughly $3 million in revenue is just over 1 percent of total company sales, the unit is the fastest-growing part of the company.

Maner isn’t totally giving away the store. The company plans to keep selling a premium version of PocketCloud for $15 that includes enterprise features like advanced security, VGA-out and the ability to connect with VMWare’s technology. Maner said he is so sure that enough of the free users will upgrade that Wyse will still be able to grow its PocketCloud revenue substantially next year.

“This is a capitalistic world,” he said. “We want people to go to the premium version.”

Wyse also faces a lot of competition, from enterprise firms like Citrix to rivals like LogMeIn to tiny mom-and-pop operations.

“Every Tom, Dick and Harry has an application” for remote access, Maner said. However, he maintained that most of the programs support only one or two protocols and often use a proprietary back-end system that locks users in.

“In the long term we believe our model is the winning model,” he said. “It gives users freedom.”

The company is also working to add new features. Maner wouldn’t share all the plans, but said to think rich media.

“We are going to do a lot of stuff around video,” he said, pointing to opportunities in both streaming as well as gaming and bi-directional video.

It’s the latest reinvention of a 30-year-old company that dates back to the mainframe and minicomputer era. In the mid-’90s, Wyse went through a reinvention to center around thin clients that allowed bank tellers and other task workers to use a quiet, low-power terminal as opposed to a full-fledged PC.

“We hate PCs,” Maner said. “We want these things in the cloud.”

Of course, thankfully for Wyse, not everyone feels the same way. Free or not, PocketCloud would be useless if it weren’t for the fact that most of the rest of us depend on those bulky, hard-drive-equipped PCs Maner derides.

Reports claim that Microsoft Live Search, once known as Windows Live Search and, prior to that as MSN Search, will henceforth be known as…

Bing.

Which is pretty much what we’ve expected all along. Just what form Bing will take is another matter entirely. Will it simply be Live Search updated and recast? Or will it involve something more? Like perhaps that long-rumored deal with Yahoo (YHOO) BoomTown’s been talking about? Or what if, ZDNet’s Mary Jo Foley speculates, “Microsoft and Yahoo announce some kind of jointly-managed company that will trade ad sales for search engine placement. This ‘MicroHoo’ won’t be a merged Microsoft-Yahoo. Instead it will be some kind of ad/search entity.” What if, indeed. We may find out later this week.

UPDATE: Interesting. ZDNet’s Larry Dignan points to a report from Jeffries analyst Katherine Egbert that suggests Microsoft is indeed preparing for some sort of joint venture or acquisition. A quick excerpt:

“It’s also possible that Microsoft could debut a partnership or make an acquisition of some type that will bolster its online search presence. The software giant registered an LLC Corp. in Delaware last week, a move often made in advance of acquisitions or joint ventures. The registration gave rise to widespread speculation that Microsoft would acquire Citrix since the name of the LLC is somewhat similar to Microsoft’s code name for Citrix. While that’s possible, the timing of the registration and recent debt raise indicate that it might be more likely Microsoft uses the LLC to form a partnership that will boost the amount of traffic flowing through its search engine, perhaps through a partnership with Yahoo! or others.”

Their top five growth picks now include:

• Apple (AAPL)
• Cisco (CSCO)
• Citrix (CTXS)
• Research In Motion (RIMM)
• Visa (V)

New to the list are Cisco, Citrix and RIM. Removed from the list: Oracle (ORCL). Other slots were created by stocks previously removed by stop-loss rules.

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