Today Xenocode's going after the bigger market of business IT shops with an application virtualization product that the 10-person, Pioneer Square company is launching today.

Xenocode's Virtual Application Studio works similarly to the .Net product, as a self-contained, lightweight virtualized machine upon which the applications are run.

(The .Net product in effect attaches the runtime to applications so they can run without having to install the appropriate version).

The application studio uses a 500 kilobyte microkernel that runs applications but doesn't hog system resources, Obata said. It's small enough that it can be loaded with applications on a USB memory stick for plug-and-play deployment of a virtual desktop.

A business using Windows Vista, for instance, could use the system to run older applications that are incompatible with the new operating system.

Obata, 30, said it's still early days for virtualized applications, but he's confident the company's onto something big.

"I think it's going to become a pretty standard way of distributing software,'' he said.

Apparently investors agree.

Obata said his phone has been ringing off the hook since details of the new product leaked out, giving him plenty of options to get funding, expand the business and develop a new sales channel besides its Web storefront.

"I'll probably have three messages from VCs on my phone when I get out of here,'' he said over lunch on Monday.