Citrix Closes XenSource Deal, Does Deal with Dell and Xen Desktops

Published: October 30, 2007

by Timothy Prickett Morgan

Citrix Systems completed its $500 million acquisition of server virtualization software maker XenSource just in time for Xen to be the star of its iForum user group and partner meeting in Las Vegas, which drew a crowd of around 4,000 last week. Having completed the XenSource deal, which makes Xen a credible alternative to the products from VMware because of the more than $1.1 billion business that is behind it now, Citrix is keen on talking up its end-to-end virtualization strategy.

Citrix has over 200,000 customers worldwide using its various products, including MetaFrame and Presentation Server remote access products and its NetScaler line Internet acceleration products. When you do the math, about 75 percent of the Internet users in the world access sites powered at least in part by NetScaler; its access products drive about 70 million corporate users worldwide as well. And now, with the XenEnterprise hypervisor and related system provisioning and management tools, Citrix can move deeper into the data center, and with a new desktop virtualization product called XenDesktop, can dive into the desktop on the other end of the wire now, too. So Citrix will be able to virtualize the desktops, the servers, and the applications that reside on both.

XenEnterprise has just passed its first 1,000 customer mark this week, and is a far cry away from the more than 20,000 customers that VMware has for its virtualization products. But, then again, Citrix has a well-established channel, strong partnerships with Microsoft for both desktops and servers, and a much larger customer base into which it can cross-sell Xen products. Which is why Citrix was willing to pay $500 million for a company that had just broken through an annual sales rate of $1 million.

XenSource had just completed development of its XenEnterprise 4.0 release, which will more or less be on par with VMware's Infrastructure 3 suite when the integrated Veritas file systems start shipping with the XenEnterprise hypervisor and tool bundle as the year comes to a close. So Citrix did not have a lot of work to do there. But the company is working to move Xen into the desktop space, and according to Gordon Payne, group vice president and general manager of the Advanced Solutions Group at Citrix, it will be taking the Xen hypervisor and mixing it with the desktop brokering and authentication software in Presentation Server and its operating system provisioning software (made possible through its acquisition of Ardence in December of 2006) to create what it is calling XenDesktop 2.0. The setup will allow companies to provision and deploy virtualized desktop environments for those who want thick clients, and of course those who want to run virtualized platforms back on the server can deploy XenServer and link into it with a thin client.

XenDesktop 2.0 will be in a tech preview before the end of October, and will be generally available sometime in the first half of 2008. It is going to take some time to integrate and test the products. Payne says that while Citrix is interested in supplying the complete virtualization stack for desktop environments, it is not interested in excluding anyone from the stack, either. "We will be open, and we will work on partnering with other desktop brokers and hypervisor providers to allow our customers to make choices," he says. Citrix is not announcing pricing for now, but you can bet that it will compete against the VMware Workstation and related provisioning tools that VMware has created or gets through partners. "Pricing will be simple, cost-effective, and competitive," is all Payne would say about it.

Citrix also announced that Dell will be deploying the XenServer OEM Edition hypervisor in selected models of the PoweEdge server family and will be manageable from within Dell's OpenManage toolset for its servers. The OEM Edition has some constraints to it, so Dell will also be preloading XenServer Enterprise Edition and allowing customers to upgrade to the full product through a license key activation. Dell is also now a distributor for XenServer Enterprise as well as part of this partnership with Citrix. Dell expects to star shipping the embedded OEM edition of Xen in the first quarter of 2008, and presumably it will be free or carry a nominal charge. XenServer Enterprise costs $1,599 for a dual-socket server for an annual license and $2,499 for a perpetual license on the same machine.

Citrix also made one other interesting announcement at iForum. The company ahs worked with Hewlett-Packard to expose a set of application programming interfaces inside Presentation Server called the Power Smart APIs that will interface with the Integrated Lights Out (ILO) service processors inside of ProLiant servers such that Presentation Server can feed the ILO card the data to allow it to make decisions about turning off or activating ProLiant servers in a Citrix cluster as workloads scale up and down in loads throughout the day.

RELATED STORY

Citrix Buys Virtualization Challenger XenSource for $500 Million

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