Xen and the Art of Virtualization Software

Not wanting to be left out of the virtualization arms race, Citrix recently bought XenSource in a deal worth $500 million, giving Citrix entrée into both the server and desktop virtualization markets.

Citrix officials said the deal, which involved both cash and stock, is expected to close some time during this year's fourth quarter. The addition of XenSource's technology is designed to complement its line of thin client software that distributes business applications from servers to desktop computers.

The deal comes right on the heels of a blowout public offering by VMware, largely seen by many industry observers as one of the leaders in virtualization software market. The company's stock price rocketed from its offering price of $29 to $51 on the first day.

XenSource flagship product, appropriately called Xen, is "hypervisor" software that lets one system run multiple operating systems at the same time, giving IT admins an efficient and relatively inexpensive way of replacing many older servers.

Another immediate advantage for Citrix is the deal makes it much more competitive in the open source market, as Xen is presently bundled with the two leading Linux distributions from Red Hat and Novell. The product also works with Windows, giving users the flexibility of mixing and matching Windows and open source technologies in the same environment.

The deal also brings into sharper focus the nature of the relationship between Citrix and Microsoft. Citrix could, for instance, go mano y mano with Microsoft's upcoming Viridian virtualization software -- or Microsoft could take the initiative and decide to incorporate some of XenSource's software into its offerings. I wouldn't bet on the latter.

According to the terms of the deal, XenSource CEO Peter Levine will be placed in charge of Citrix's new virtualization and management division.

Vista Hitting an Air Pocket?
In a new report issued this week by Forrester Research based on interviews with 45 IT managers about their Vista adoption plans, the research company is recommending laptops as a more "natural" place for most IT shops to do their first Vista pilots. Because of the systems' small-form factors, locking down data on the hard drives is a top priority with most chief security officers and chief information officers. Another reason: Any system with a standard application configuration that has passed typically stringent compatibility testing is a good place to start.

Another issue to surface in the report is that a good number of those surveyed are struggling with how they will deal with the much-anticipated service pack 1 for Vista. Microsoft officials, of course, are characteristically mum on when said SP1 will arrive exactly, but the smart money appears to be on an early 2008 arrival.

Back in May of this year, Forrester had conducted interviews among a range of different PC decision makers about their future plans for Vista deployment, and the general indication was that most were going to deploy the new operating system fairly aggressively. Most said they were going to time the Visa upgrade with scheduled PC upgrades as a way to more efficiently streamline their OS migration projects. Subsequently, however, many IT managers have become less aggressive in their Vista deployment plans, mainly because of the "intricacies" of overseeing typically large and very distributed computing environments.

Kumar Begins 12-Year Sentence
In a sad end to what was a brilliant career, former CEO of CA Sanjay Kumar this week began serving a 12-year sentence for his part in a $2.2 billion accounting scandal. Kumar, 45, will serve his time at a minimum-security federal prison based in Fairton, N.J.

In April of last year, just before his trial was to begin, Kumar plead guilty to multiple charges including conspiracy, securities fraud and obstruction of justice stemming from an accounting scandal that resulted in shareholders losing over $400 million. In that admission of guilt, Kumar confessed to improperly booking software license revenues in order to meet the profit expectations of Wall Street analysts. Subsequently, he then lied to investigators about it.

Earlier this year, the federal district court in Brooklyn approved a settlement requiring Kumar to pay a whopping $800 million to all victims of the fraud. Kumar agreed to pay $52 million by the end of next year by liquidating assets, including luxury cars and a yacht.

In many such cases, executives like Kumar rarely serve out their full sentence, usually getting out after about half that time. But because of the scope of the CA scandal, some observers believe Kumar will serve all but a year or two of the 12-year sentence.

Still a Hunk of Burning Love
Today is the 30th anniversary of the passing of The King, Elvis Presley, and it just wouldn't seem right, even in a newsletter that focuses on Microsoft, not to pay a small tribute.

Even after being dead for three decades, The King still made $37 million in 2006 according to Forbes, and is expected to earn over $40 million this year according to other estimates. In fact, Elvis remains the top earner among all dead celebrities.

It appears The King is making more dead than Microsoft is making from Windows Live.

About the Author

Ed Scannell is the editor of Redmond magazine.

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