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Citrix buys XenSource for $500 million

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Citrix buys XenSource for $500 million

Citrix Systems announced today it has signed an agreement to acquire XenSource for approximately $500 million in stock and cash.

Citrix apparently is interested in getting in on the ground floor of the virtualization market, which their press release states is expected to grow to $5 billion over the next four years.  On August 13, XenSource released their XenEnterprise v4 product line.  This newest enterprise-level virtualization tool added increased management, scalability and new mobile machine capabilities to the firm’s platforms.

Citrix says it currently has all Fortune 100 companies and 98% of Fortune 500 companies as customers.  In 2006, the firm had  revenues of $1.1 billion.  Their press release indicated intentions to push the XenSource product to their existing customer base that is not already using Xen.  XenSource is one of the major virtualization software companies competing with companies like VMware, Microsoft, Parallels.

Assuming everything proceeds without issue, the acquisition will be completed in the fourth quarter of this year.