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Citrix Systems to acquire XenSource

Citrix/XenSource union raises virtualization ante; challenges will grow

Battle brews over who controls the virtualization software that controls the data center.
By John Fontana , Network World , 08/15/2007
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Underneath the dollar signs of Wednesday’s Citrix acquisition of virtualization vendor XenSource, are the shifting motives of a complex web of vendor alliances aiming to provide corporate users with virtual environments and the tools needed to manage them.

With its $500 million acquisition of XenSource, Citrix cemented the evolution of its desktop tools via virtualization and established its intent to deliver server virtualization; XenSource, which will operate as a division of Citrix, now has the capital and sales channel to become a serious corporate alternative to VMware for server virtualization; and Microsoft – partner to both companies – may just have found the alliance to bridge the gap between its hypervisor vaporware this year and next year’s shipment of the real deal.

Citrix goes shopping
Citrix is wasting no time building out its technology empire. Here is a sample of the company's buys.

Acquisition target: XenSource Caymas Systems* Orbital Data Teros NetScaler Net6 Expertcity
Deal announced: August 2007 June 2007 August 2006 November 2005 June 2005 November 2004 December 2003
What Citrix paid: $500 million Undisclosed $50 million November 2005 $300 million $50 million $225 million
What Citrix gets: Server- and desktop- virtualization technology. Network access- control and SSL VPN technology. WAN- optimization technologies. XML security and appli-cation fire-wall soft-ware. Application- acceleration technology. SSL VPN access gateway and VoIP technologies. Web-based desktop access technology.
*Remaining assets of defunct company*Remaining assets of defunct company 
Click to see: A list of Citrix buys

What users will get is a Citrix desktop virtualization environment and a number of options for deploying and managing virtualized servers on Windows. And they will see a determined effort from the Citrix/XenSource/Microsoft triumvirate to pool resources to battle VMware, which has nearly 85% of the virtualization market.

Corporate users, most notably Windows shops, will now have a legitimate alternative to VMware if they don’t want to wait for Microsoft to deliver its first-generation hypervisor technology in mid-2008.

In addition, Microsoft’s partnership with XenSource means users could opt for the Citrix/XenSource hypervisor now and migrate to the Windows Server Virtualization (WSV) hypervisor and Microsoft’s management tools when they ship.

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Comments (3)
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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...

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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...

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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

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