Brian Madden's Commentary on Citrix + Xen

I'm just all twitterpated about this Citrix + Xen merger. So, bear with me until we get through the hype cycle on this one. After reading Mary Jo's commentary on it, I decided to dig into Brian Madden's.

Even before the merger was announced, Brian was speculating on whether Citrix needed its own hypervisor:

Why would Citrix want to own a hypervisor? Everyone knows that Citrix has grown from a pure server-based computing company into an application delivery company. Virtual desktop delivery (whether you call it VDI, xDI, or VCC) is a big part of that.

Citrix released Citrix Desktop Server (CDS) v1.0 this past April. Even though it was a brand-new product in terms of SKU, CDS shares a lot of code with Presentation Server. At iForum Edinburgh this past June, Citrix publicly announced some goals for future versions of CDS; specifically, the ability to connect to Windows desktop VMs directly via the ICA protocol and the ability to manage pools of Desktop VMs as if they were single-user Presentation Servers.

This VDI/xDI/VCC thing is hot. Even if you don’t believe in it today, the concept of delivering a desktop as a service is going to continue to grow. (In fact, many people are now realizing that some form of this might soon replace all desktops in a corporation—-not just the “special case” scenarios that are popular today.)

The problem is that if you want to do this right now, you need products from several different vendors. Some vendors (such as Virtual Iron and Provision Networks) have partnered to offer single-SKU end-to-end desktop delivery solutions that combine the virtualization, desktop brokering, and server-based computing management into a single platform. The problem with these non-Citrix solutions is that remote access to the desktop VM is provided via Microsoft’s RDP protocol, and the reality is that in today’s world, RDP does not perform nearly as well as ICA in WAN environments. The SpeedScreen technologies, the compression, and the graphical performance of Citrix Presentation Server in just flat out blow away RDP across WAN links. (In reality, the Provision / Virtual Iron solution is a “local network” solution only.)

Citrix sees the value of delivering desktops. They have / will have this great ICA / Presentation Server-based product for doing so called “Desktop Server.” They have a way to manage images with Ardence. They can track performance with EdgeSight. They can stream applications into the desktop with the application streaming capabilities of Presentation Server. Citrix has a complete solution except for one thing: a hypervisor.

This piece continues on with an excellent analysis of Citrix's hypervisor desires...

I'm not going to post the full post here, so you can read it at:
http://www.brianmadden.com/content/article/Should-Citrix-buy-a-hypervisor

It is a must read. The reason why I'm not posting it is because Brian continues in a second post yesterday that includes some juicy financials:

First, $500M is a VERY expensive price to pay for XenSource. XenSource was a private company, but the general belief is that they had less than $5M in revenue (with some people saying less than $1M).

The Citrix press release says that with this acquisition, Citrix will jump head-on into the server and desktop virtualization markets, and that they expect to grow to a nearly $5B company in the next four years!

The press release also reiterates a lot of what I wrote about last week with regards to strengthening the relationship with Microsoft, but everything that I've heard is that Microsoft is not happy about this. Again, now Citrix is going head-to-head with Microsoft in this market.

The whole XenSource thing is a little strange because XenSource's technology is based on the open-source Xen hypervisor. So Citrix will not own the IP of the core hypervisor. (What exactly did they just pay $500M for?)

This article comes from:
http://www.brianmadden.com/content/article/Citrix-buys-XenSource-for-500M

What are your thoughts on the whole deal? Was this a good idea?