When software virtualization company VMware Inc. (NYSE: VMW) went public this week and shares went directly into the stratosphere, the concept of "virtualization" suddenly became part of the common media jargon overnight. VMware basically sells products that create "virtual" computing environments from vast, interconnected resources. Why have a bunch of local and unused computing machines when you can string resources together and attain quite a bit more efficiency?
Well, VMware's IPO dust has settled, and Citrix Systems didn't spare a breath in announcing the $500 million acquisition of software virtualization company XenSource. Call this the week of virtual bops in the market.
Fresh off the completion of advertising company aQuantive, Microsoft Corp. (NASDAQ: MSFT) has just completed the largest acquisition in its history at over $6 billion. Is it ready for another one? Some analysts are pegging the possible acquisition of Citrix Systems (NASDAQ: CTXS) by the software giant based on how Citrix Systems has grown in the past (largely by having access to Microsoft's source code to build its own software), as well as the relationship XenSource already has with Redmond. Is a buyout in the air?
There are probably some technical issues that prevented Microsoft from acquiring XenSource itself, but by gobbling up Citrix after it completes swallowing XenSource, Microsoft could stand up pretty well in an instant in the software virtualization field -- and it definitely has the cash. Although Microsoft has been called a laggard and accused of lacking innovation for quite some time, the software company shows a decent bit of forward-thinking with its recent aQuantive acquisition and this rumor (a good one) of a forthcoming Citrix Systems buy. Is Redmond dead any time soon, as many Google Inc. (NASDAQ: GOOG) fans are fond of predicting? I highly doubt it.
Disclosure: I own MSFT shares as of 8-16-07.
Microsoft (MSFT) considering buying Citrix Systems (CTXS)?
Recent Posts
- Investors pressure private equity funds to cut fees (7/03/2009)
- Will an IPO bring more transparency to KKR? (7/02/2009)
- Will FDIC's new rules for buying failed banks deter private-equity investors (7/01/2009)
- Blackstone anticipates recovery in Europe (6/30/2009)
- Carlyle, KKR, JC Flowers and others eye Nan Shan Life (6/29/2009)
Add your comments
BloggingBuyouts is provided for informational purposes only. Nothing on the service is intended to provide personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter. You are solely responsible for any investment decisions that you make. The contributors who provide the content of BloggingBuyouts may, from time to time, hold positions in the securities discussed at the time of writing and they may trade for their own accounts. Such holdings will be disclosed at the time of writing. By using the site, you agree to abide to BloggingBuyouts' Terms of Use.
Reader Comments (Page 1 of 1)
8-17-2007 @ 5:01AM
George Dunlap said...
The one issue with Microsoft buying anything XenSource related is XenSource's connection with Linux. Microsoft doesn't want anyone working directly for Microsoft touching any Linux source code with a 10-foot pole. Especially in a company so large, it's too much of a risk that some engineer who sees some Linux code will imitate it in, or outright copy it into, the Windows codebase. Then MS will be open to accusations of copyright violations. It's better to be able to say, categoriacally, that no one at MS works with Linux.