Citrix Acquires XenSource

The acquistion will be financed with share options and cash; a sum of US$ 107m has been allocated for conversion to share options. The take-over is scheduled for completion by the end of this year.

Citrix is a supplier of proprietary thin client solutions. XenSource offers free and commercial virtualization software and services. Citrix envisages seamless integration of XenSource virtualization technologies with its own products.

In the press release accompanying the acquistion, Citrix states that "The acquisition will also strengthen each company’s strong partnership with Microsoft and commitment to the Windows platform." Following the acquistion, the Xen team will be helping to achieve interoperability with the planned Microsoft "Viridian" hypervisor. The XenSource Team will become Citrix's new Virtualization & Management unit with XenSource boss Peter Levine at its head. Levine will be reporting directly to Citrix President Mark Templeton. Xen project leader Ian Pratt will be continuing Xen's Open Source strategy under the Citrix umbrella.

XenSource has announced the new release of the commercial variant of the XenEnterprise v4 hypervisor software for next week. At the same time, the company reports that user figures have doubled to 650 in the past three months. Based on this, Citrix's expectations for Xen are high with Citrix expecting turover to grow by US$ 50m in 2008.