As new hopefuls jump aboard the virtualization bandwagon, incumbent market leader VMware (NYSE: VMW) is doing its part to keep the competitive landscape uncluttered. The former EMC (NYSE: EMC) subsidiary just acquired two much smaller virtual machine specialists with an eye toward consolidating its sector leadership.

For an undisclosed and presumably rather small amount, VMware just picked up virtual-server consulting firm Foedus, as well as application virtualizer Thinstall. VMware has now bought three companies since going public and becoming independent from its former parent company, and it's picked up seven since June 2006, predating the EMC spinoff. Yes, subsidiaries can make deals of their own sometimes.

Of the two new additions, Thinstall is easily the most intriguing. With its application-packaging software, you can bundle up any application into a single, self-sufficient binary that runs from a USB thumb drive. The miniature virtual operating system that's wrapped around the software keeps settings and program libraries separated from the Microsoft (Nasdaq: MSFT) Windows platform that powers whatever computer you need to run the application from. As a result, there are no installation hassles, and you get a clean, untouched operating environment no matter what. Thinstall's customer list includes the U.S. Department of Defense, NASA, and the IRS.

Citrix Systems (Nasdaq: CTXS) makes a living from that sort of application bundling, but it doesn't see the Thinstall acquisition as a threat. Instead, a blogging Citrix employee says the move validates his company's core strategy and raises public awareness of these technologies. In the end, VMware is simply growing the market rather than stealing share. And I tend to agree.

We've seen that story play itself out many times before: A fresh innovator comes along and breaks the established rules of some entrenched business. When the big boys join the fray, the new kid simply grows faster, since its methods have received an implicit stamp of approval from the competition. Wal-Mart's DVD mailers didn't destroy Netflix.  Tibco Software (Nasdaq: TIBX) was in the vanguard of service-oriented software architecture, way before anyone called it Web 2.0 or SOA, and now we're just wondering who will acquire that company, and when.

Citrix is riding that same wave, while reciprocating the compliment back to VMware when it bought virtual-server platform XenSource last year. These guys should be able to feed off each other, and off other industry giants, for years to come.

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Fool contributor Anders Bylund is a Netflix shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is always at the forefront of trustworthy financial coverage.