Citrix Bags XenSource for $500M

Networking specialist Citrix has bought privately held virtualization vendor XenSource for $500 million in cash and stock, as the vendor looks to link desktop, server, and storage virtualization. (See Citrix Acquires XenSource and Xen & the Art of Virtualization.)

Speaking on a conference call this morning, Citrix CEO Mark Templeton explained that the deal adds to his firm's current virtualization offerings. (See Application Virtualization Takes Hold and Up the V Stack.) "This clearly positions us as the only vendor providing solutions for desktop, application, and data center virtualization," he said, explaining that XenSource adds the server and storage parts of this equation.

XenSource has ramped up its storage virtualization efforts during recent weeks, signing an OEM deal to embed Symantec's Storage Foundation product line into its flagship XenEnterprise offering. (See Symantec Drifts Into Xen and XenSource Signs Symantec OEM.) Earlier this week the vendor unveiled the latest version of XenEnterprise, adding yet more flesh to the bones of its storage strategy. (See Storage Virtualization Strides On and XenSource Unveils XenEnterprise v4.)

The initial signs are that XenSource's 80-strong workforce will move over to Citrix when the deal closes in the fourth quarter. "XenSource has the people, product, and technology that we need to accelerate our time to market," said Templeton, adding that XenSource CEO Peter Levine will head up a new virtualization division within Citrix.