Citrix Shakes Up Virtualization Market with Acquisition of XenSource

On August 15, 2007, Citrix Systems announced its intention to acquire open source virtualization software vendor XenSource for $500 million in cash and stock. Although it will be a distant second, the combined Citrix/XenSource is clearly the number two vendor of x86-based virtualization technology. The move fits with Citrix’s strategy of providing a complete application delivery platform from the enterprise data center, to the branch and to the client. More importantly, Citrix is the first large vendor ($6 billion market cap) to go head-to-head against VMware.