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Citrix ships XenServer 5.5

Let the virtual fight begin

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Citrix Systems today announced that its XenServer 5.5 hypervisor for servers and its related tools for managing virtual machines are now shipping.

Let the battle for whatever budget dollars are available for x64 server virtualization projects begin. Microsoft, VMware, and XenServer are going to be engaged in a price war that rivals that between Intel and Advanced Micro Devices for physical x64 processors.

Citrix and VMware have been circling around each other since earlier this year, and now both vendors are shipping their latest and most sophisticated server virtualization products. VMware launched its vSphere 4.0 stack and its core ESX Server 4.0 hypervisor on April 21 and said it would have the product out the door by the end of the second quarter. vSphere 4.0 started shipping on May 21.

XenSource - which created the open source Xen hypervisor in 2001 and then was eaten by Citrix in in August 2007 for $500m - has always been a bit of a wiseguy. The big XenServer 5.5 announcement - including a much-improved hypervisor, much lower prices, and a key partnership with Microsoft to create a Windows bundle of Xen and Microsoft technologies - was made to try to slow down the momentum that VMware was building with its products. Launching XenServer 5.5 in February probably didn't help sales of the prior XenServer 5.1 release, but the economic meltdown was just getting going back in September when XenServer 5.1 came out and no one was going to sell much of anything until after the summer holidays this year anyway.

Now that ESX Server 4.0 and XenServer 5.5 are both shipping and all of the prices and feeds and speeds are out there - and the global economy seems to be stabilizing on some fronts at least - it will be interesting to see who can sell more tools for virtualizing servers. In a match-up between a VMware with an ex-Microsoftie in charge and a XenServer with a Microsoft tag teaming with Citrix Essentials for Hyper-V, the odds seem to be about even. That's about as good as it gets in any part of the IT business when one company held the lead for such a long time.

It probably doesn't hurt that since February, more than 100,000 companies from 50 countries have downloaded the beta versions of the XenServer 5.5 stack. And those downloads are no doubt being driven by the fact that XenServer Enterprise - which used to cost relatively big bucks - is now free.

If XenServer suddenly takes off, don't be surprised if Microsoft just whips out some cash and buys Citrix, despite all of its work on Hyper-V. With Citrix shares trading at around $20 a pop back in October and then again in March, giving Citrix a market capitalization of around $3.7bn, Big Bill Steve should have ponied up maybe $5bn to buy Citrix and tightened its grip on the data center instead of obsessing about Google and Yahoo. Now, with Citrix shares trading at over $30 apiece and the company worth just over $6bn, Microsoft would have to pay a lot more money to buy Citrix. ®

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