IBM and Canonical Thursday announced a virtualized software bundle combining Lotus desktop applications running on top of Ubuntu Linux that they say is far cheaper than running Microsoft's Office suite on conventional Windows PCs.

It's the latest salvo in IBM's ongoing battle to break Microsoft's stranglehold on the desktop.

According to IBM, the virtual Linux desktop suite could cost, for large companies, as little as $59 per worker. That would include a minimal configuration of $49 for the VERDE desktop virtualization software from a third vendor, Virtual Bridges, $10 for Ubuntu Linux support, and no cost for the Lotus Symphony productivity software.

A full-fledged Linux desktop solution that includes Lotus Notes e-mail, Sametime instant messaging, and other collaboration tools would cost $258 per user, according to IBM.

Customers would also save on labor costs due to reduced maintenance from moving to a server-side solution, said Inna Kuznetsova, director of Linux strategy for IBM, as well as lower hardware costs by extending the lifespan of desktop PCs.

"This is hopefully the first step in multiple announcements to come from us," she said.

In August, IBM said it had reconfigured its Lotus productivity and collaboration software to make it easier to bundle with Linux distributions such as Red Hat, Ubuntu and Novell Inc.'s SUSE Linux.

Microsoft did not immediately respond to a request for comment.

IBM and its partners plan to sell the bundle directly as well as through reseller partners. Asked if IBM planned to host and deliver the software itself as a service, as Microsoft plans to do with Office Web, Kuznetsova said, "we have no announcements at this time, though we will certainly look at this."

Kuznetsova admitted that IBM's calculations do not factor in the potentially expensive cost of migrating users from Microsoft Office and Windows over to the Linux virtual desktop environment, nor the cost of extra server and networking hardware to host the software.

Nor has IBM calculated how the Linux virtual desktop stacks up cost-wise versus the virtual Windows desktop route, using desktop virtualization from VMware Inc., Citrix Systems Inc., or Microsoft, Kuznetsova said.

"We are certainly cheaper than migrating to Office 2007 on Vista ," she said.

For more enterprise computing news, visit Computerworld. Story copyright Computerworld, Inc.