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Technology Deals Citrix to acquire XenSource
Technology Deals Citrix to acquire XenSource | Citrix to acquire XenSource |
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| Written by Stephen Withers | |
| Thursday, 16 August 2007 | |
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XenSource delivers and supports commercial virtualisation products based on the open source Xen hypervisor. "Today is a great day for the virtualisation market because customers will now have a strong alternative that is open, proven and backed by one of the most successful end-to-end software infrastructure leaders in the entire industry," said XenSource CEO Peter Levine. "This move is not about competing for the five percent of the market that is already being served. It's about steering into the 90 percent white space that is wide open, both at the server and in new emerging opportunities at the desktop." The transaction involves a combination of cash and stock. Subject to regulatory and stockholder approval, it is expected to be completed by the end of the year. It will initially result in a small reduction in profitability for Citrix, with an expected increase of just $US50 million in revenue compared with a $US60-70 million expected increase in cost of revenues and operating revenues during 2008. Since Citrix's current revenue is running at around $US1.2 billion, that hardly be noticable. "Incorporating XenSource’s dynamic virtualisation services into our market-leading application delivery infrastructure will enable our entire product line to be more flexible, agile and dynamic, qualities that have never been more important than they are today," said Mark Templeton, president and chief executive officer at Citrix. "We believe application delivery will be a defining issue for IT over the next decade because applications are the language of business. Companies that are fluent with application delivery will be the winners, while those who do not will lag behind, struggling with the pace of change in an increasingly dynamic world." The deal was endorsed by the Xen project. "This announcement represents a key milestone for the Xen project," said Ian Pratt, leader of the Xen project and co-founder of XenSource. "Citrix is committed to our community and the principles of transparency and neutrality that allow us to work together on the reference standard for virtualisation, promoting the rapid, ubiquitous adoption of virtualisation." XenSource and Microsoft have been collaborating to allow interoperability between Xen-enabled Linux and Windows Server Virtualisation, according to Benjamin Armstrong, program manager at Microsoft. XenSource has been adding to Xen the equivalent of Windows 'enlightenments' that improve performance by allowing the operating system to detect that it is running on a hypervisor and then communicate with it instead of attempting to access certain hardware features directly.
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