What Will Come After the Citrix/XenSource Deal?

Arthur Cole

We just can't seem to get away from virtualization this week, which isn't terribly surprising considering the technology's potential to remake the entire enterprise computing industry as we know it.


Today we saw the bomb drop that application delivery firm Citrix is buying XenSource for a cool half-a-billion dollars, not bad for a firm with barely a fraction of a market that itself has only captured a tiny segment of overall enterprise users. Still, with access to Citrix channels, built up by virtue of the company's Presentation Server, it now looks like XenSource has the means to gain some level of parity with market leader VMware.


The deal also features a third major player: Microsoft. Even though the Xen hypervisor is open source, the company has built in broad compatibility with Redmond's upcoming Viridian hypervisor. And Citrix practically built its business around application delivery in Windows environments. While Microsoft seemed to bless the deal, having contributed a comment from senior VP Bob Muglia to the Citrix press release, it's still unclear why customers would need hypervisors embedded on both the operating system and presentation server levels.


That's why we should keep our eyes peeled for Microsoft to buy up Citrix altogether, according to Eric Savitz, blogging on Barrons.com. Taking a cue from analysts at the 451 Group, he notes that Microsoft could gain all of the advancements recently announced in the XenEnterprise v4 hypervisor for Viridian, and largely do away with the pesky Linux/open source attitude cultivated at XenSource.


But that's only the beginning of the possible machinations that could emanate from this deal, according to virtualization.info. In the first place, you have Virtual Iron, another hypervisor developer, which has based its system largely on the Xen platform. How receptive will they be to an increasingly Windows-based product? There are also Red Hat and Novell, which have integrated the Linux versions of Xen into their releases, and may decide to switch over to the upcoming KVM system, which is based on the Linux kernel.


All of this will certainly get sorted out in due course. The immediate impact of this deal, however, is that it all but swept Tuesday's VMware IPO off the front page. In case you were wondering, the company raised close to $1 billion in one day.

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