- 12 myths about how the Internet works
- Smartphone smackdown: Storm vs. iPhone
- IETF: Should we ignore the Kaminsky bug?
- Top 10 wicked cool algorithms
- How to recession-proof yourself

On the heels of Tuesday’s successful VMware IPO, rumors are again circulating that Citrix and XenSource may be hatching an acquisition deal just as the server and desktop virtualization markets are red hot.
Investment banking firm Jefferies & Company issued a report Tuesday on Citrix entitled Citrix-Xen Makes Perfect Strategic Sense.
The company says Citrix’s close relationship with Microsoft – the two have worked together for years on thin-cleint technology – is key in that Citrix could help Microsoft make up ground on VMware, whose successful IPO on Tuesday confirmed its leadership role in the emerging virtualization market.
Jefferies pegged $400 million as a projected price Citrix would pay for XenSource.
Neither XenSource or Citrix had any comment on the rumors.
Jefferies noted Microsoft’s struggles to release software to competently compete with VMware’s ESX platform.
The software Microsoft is struggling with – Windows Server Virtualization (WSV), an add-on for Windows Server 2008 – is slated to ship mid-2008 even though Jefferies incorrectly reported the dates.
The report says the relationship Citrix and Microsoft crafted in the 1990s around Citrix’s MetaFrame thin-client technology provided Citrix an insiders view of Microsoft’s roadmap and allowed Citrix to focus on building enhancements and improvement to the overall platform.
Jefferies said that scenario could play out again if Citrix acquired XenSource and provided Microsoft with technology it could use to battle VMware as WSV remains in development. Citrix could then focus its efforts around the desktop and management tools.
Observers say it is a logical strategy given the fact that Microsoft faces an uphill battle in proving it can deliver reliability in its Windows-based virtualization platform where system restarts of servers hosting multiple virtual machines can prove costly.
XenSource, which is carving out a niche with its open-source Xen hypervisor engine among Linux vendors, namely Red Hat and Novell, could fill the gap if WSV stumbles out of the gate next year.
Microsoft has already pulled some features in order to keep WSV’s ship date on track.
XenSource also develops management tools for monitoring collections of virtual servers, while Microsoft’s forthcoming Virtual Machine Manager will not support WSV in the first release.
Comments (3)
WANScalerBy charl6f on November 27, 2007, 1:04 amIs the WANScaler mobile software the same software that runs on the appliance? Also, the client pricing model is kind of a pain to manage. Would be cleaner if...
Reply | Read entire comment
Has Microsoft found a virtualization partner?By Micronet on August 16, 2007, 6:03 pmSee Microsoft Subnet for more Microsoft-related news, blogs, security alerts, technical group. Because Citrix and Microsoft have been close partners, the thought...
Reply | Read entire comment
Citrix/XenSource Speak OutBy sumj on August 16, 2007, 9:59 amWe want to hear from YOU: Does the Citrix/XenSource union raise the virtualization ante? what are the pros/cons of this acquisition? Polls - Take Our Poll
Reply | Read entire comment
View all comments