Citrix buys Xensource for US$500mn

Virtualisation market heats up with Citrix's purchase of XenSource.

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By  Michele Howe Published  August 16, 2007

Infrastructure software maker Citrix Systems has acquired virtual infrastructure company XenSource for approximately US$500 million in cash and stock.

Citrix, which develops software that delivers applications over a network to thin clients, said the purchase would enable it to move into the server and desktop virtualisation market, which it expects to grow to nearly US$5 billion over the next four years.

XenSource is a provider of enterprise-calls virtual infrastructure solutions built on the open source Xen hypervisor.

Upon closure of the acquisition, slated for the fourth quarter of 2007, XenSource will be integrated into the virtualisation and management division of Citrix.

Virtualisation is a technology used to simultaneously run multiple operating systems and applications on a computer.

The market for virtualisation is seen as red-hot at the moment. Citrix's capture of XenSource comes two days after shares in VMware, a rival of XenSource, soared as much as 79% in its debut on the New York Stock Exchange.

And with XenSource on board, Citrix could find itself an acquisition target, sources suggest - for software giant Microsoft.

Microsoft, which is seeking to expand in the virtualisation field, is planning to add virtualisation capability to Windows next year.

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