Microsoft confirmed this week that it is working on the next version of the Windows client operating system, codenamed Windows ‘7.’ While details are scarce on exactly what Windows 7 will look like or do, Microsoft is promising its largest customers that the OS will be delivered in about three years, or sometime during 2010. However, Microsoft did hint that virtualization products, now contained in the Microsoft Desktop Optimization Pack, could be a large part of the Windows 7 equation.

A Microsoft spokesperson provided a little insight into the development of Windows 7. The spokesperson says the software company is working with enterprise customers–including some on multi-year Software Assurance maintenance contracts–and business partners on Windows 7. “Microsoft is scoping Windows 7 development to a three-year timeframe, and then the specific release date will ultimately be determined by meeting the quality bar,” the spokesperson said.

A three-year timeframe would put the release of Windows 7 in 2010, which would be four years, more or less, from the time Windows Vista became available. Microsoft has said it intends to speed up the Windows development effort following the launch of Windows Vista, which suffered numerous delays and took five years to develop. Those delays could end up causing some of Microsoft’s largest customers on multi-year Software Assurance contracts to pay more for Windows Vista, which they are entitled to as part of their agreement, than if they had just purchased Vista licenses outright.

The Microsoft spokesperson also mentioned that the company is looking at ways to help customers get value from other products, such as the Microsoft Desktop Optimization Pack (MDOP), which today is available only to Software Assurance customers.

One of the key technologies included in the MDOP is the SoftGrid Application Virtualization technology, which was based on technology Microsoft obtained with its acquisition of Softricity last year. While it’s hidden away in the MDOP today, the SoftGrid technology has the potential to revolutionize how Microsoft packages and sells access to Windows.

Microsoft hasn’t said much about what it plans to do with SoftGrid, but considering Microsoft’s stated intentions to provide customers with more flexibility in how they deploy Web and desktop products–not to mention the big investment Microsoft is making in building data centers that house thousands of Web and application servers–SoftGrid could be an extremely important component of Microsoft’s strategy for selling Windows Live and Windows 7 in the future.

During a keynote on “cloud computing” at Microsoft’s partner event two weeks ago, Microsoft CEO Steve Ballmer promised more details on Microsoft’s strategy for using virtualization technology and large-scale server farms to deliver access to applications over the Web. “We’re going to have a lot more to talk to you about in this arena in the next 12 months,” he said.

Microsoft also confirmed that it is working on Windows Vista Service Pack 1 (SP1), but declined to provided details about when it will be available. “Our current expectation is that a beta [of Vista SP1] will be made available sometime this year,” the spokesperson said.

Windows Vista SP1 is important for two reasons. First, many corporate customers–out of superstition or just pure habit–are accustomed to waiting until the first release of a service pack before starting migrations. SP1 is important because it is assumed to contain changes that Microsoft had to make to satisfy Google’s complaint that Vista’s integrated search facility was too difficult to turn off, and made computers run slower when users switched to Google’s desktop search technology.