Will Microsoft Buy Citrix? The Finance World's Perspective
I was perusing around the internet earlier this week and found this article posted back during the Citrix/Xen merger:
http://www.eweek.com/article2/0,1895,2171434,00.asp
In that article, the author discusses the possibility that Citrix's acquisition of Xen combined with all the problems that Microsoft is having with their own virtualization solution (Veridian) may drive Microsoft to actually buy Citrix.
He writes:
Could Citrix Systems' purchase of XenSource for $500 million be a prelude to Microsoft's acquisition of Citrix?
Some analysts, like Brenon Daly and his colleagues at The 451 Group, in San Francisco, think so."Citrix built a $1 billion-plus business on the back of its access to Microsoft source code. XenSource's exclusive access to Microsoft's forthcoming 'Viridian' hypervisor code is a key driver for this deal," he told eWEEK Aug. 15. "For Citrix, Viridian becomes the base operating system component for its next business, just as Windows Terminal Server has been for Presentation Server."
Now, I'm not the corporate finance guy, and I'm no good with mergers and acquisitions. So, I asked a buddy of mine who consults on just these sorts of things for the IT industry whether it might be possible that Microsoft would inevitably buy Citrix.
His reponse after the jump.
Due to his position, he asked me to keep his identity a secret. But, here's his response to my question:
It would be very un-Microsoft-like to add open source code to Windows, and with GPL3 almost impossible. They like to have an integrated stack (in this case hypervisor/OS/app server). So I think it's just idle chatter.
Moreover, the Windows server team is not the Vista team. Windows server is built on a solid foundation,designed by one of the top O/S builders in history, so I suspect it will be a solid product.Why buy when you can just take? And finally, MSFT is already vested in Viridian. The only way that MSFT would buy is if Viridian is a total failure. And while we don't think it's a home run product yet (to be sure), and will lag VMware, at this point it is very unlikely Viridian will be a total failure.
What're your thoughts? Could the Xen merger, a $500M buy for a $1B company actually be a signal that Citrix is ripe for a purchase? I'd love to hear your comments.
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