Citrix wraps up XenSource acquisition

Citrix has today completed the acquisition of virtualisation firm XenSource.

The deal positions Citrix, which had previously moved into the application virtualisation market, into adjacent server and desktop virtualisation markets, which the vendor claims is expected to grow to nearly $5 billion (£2.47 billion) over the next four years.

Citrix says acquiring XenSource will enable it to offer businesses an end-to-end application delivery infrastructure based on the method of application, desktop and server virtualisation best suited for the dynamic delivery of applications to any user.

As outlined in August, when the acquisition was announced, the XenSource team and products will form the core of a new Citrix virtualisation and management division, headed up by Peter Levine, XenSource's chief executive, who will report directly to Citrix president and chief executive Mark Templeton.

Citrix also introduced two new products to immediately build on its investment, including the Xen server virtualisation engine, which has been re-branded to Citrix XenServer. The range is available as a single-server up to an enterprise edition, formerly XenEnterprise.

Citrix XenDesktop was announced as its first entrant into the desktop server virtualisation space and will ship sometime in the first half of 2008 in an attempt to "overcome the challenges of cost, complexity and user experience that have prevented virtual desktops from becoming a mainstream enterprise reality," the company said.

Citrix also reiterated its commitment to maintaining and growing support for the independent Xen open source community which develops the underlying virtualisation engine used by many commercial products throughout the industry, including those from XenSource.

"As application delivery becomes a top issue for IT and the world becomes more dynamic, [it is] important to be sure we are providing customers the most cutting-edge technologies out there," said Templeton.

The XenSource hypervisor technology was an attractive entry point into this market for Citrix, who announced its intentions to acquire XenSource for approximately $500 million (£246.8 million) - payable in a combination of cash and Citrix common stock - a day after virtualisation leader VMware's initial public offering (IPO).

The deal is not only significant in terms of Citrix's attempts to grab a share of the potentially lucrative virtualisation market, but also in terms of the close ties both companies have with Microsoft. The software giant has been a heavy backer and code contributor to Citrix in the past, while XenSource signed a deal with Microsoft last year, enabling Windows Server virtualisation to run Xen-based operating systems.

That interoperability deal paves the way for the paravirtualisation of Windows with the Xen hypervisor, granting XenSource exclusive access to the upcoming Microsoft Viridian hypervisor code due out sometime next year as part of the much delayed new Windows Server 2008, codenamed Longhorn.

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