Is Citrix's $500 Million Purchase of XenSource Paying Off?

[ Thanks to James Maguire for this link. ]

"By this measure, the XenSource acquisition has been a success. Citrix has rolled out an enterprise-class virtualization portfolio based on Xen and changed its pricing model, giving away XenServer and focusing on selling virtualization management capabilities.

""There are two ways to measure any acquisition. The first is pure revenue growth. The second is how much incremental growth it adds to the entire product portfolio," Babineau said. "With Citrix it's tough to measure. Xen certainly fits well in their portfolio, but how much growth is it driving? It's hard to say."

"Even so, Enterprise Strategy Group believes this was a smart acquisition. Virtualization blends well with Citrix's other product offerings, and server virtualization as a technology gets a boost by having someone well versed in the enterprise software market championing it.

"When Citrix started giving away XenServer, there were plenty of critics claiming this was a desperate move. Babineau believes the opposite is true. "When we see a vendor stop investing in technology from an acquisition, we know the acquisition failed. You don't see that with Citrix and Xen. They're committed."

Complete Story

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