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With VMWorld Europe coming up,it seems Citrix is trying to get VMWare out of its warm cozy mansion, it seems they plan to announce next week that they won’t charge anymore for XenServer.

Altough the underlying Xen technology is fully Open source , Citrix doesn’t plan on fully opensourcing XenServer itselve yet. So how will they make their money then you’d ask ? By shipping a new managment framwork that will support both XenServer and the Microschoft Hyper-V platform.

It looks like Citrix is also planning to announce a similar agreement with Micro
soft as RedHat already did earlier this week.

So what will VMWare do as a reaction next week ?

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Over a year after the first big Open Source Virtualization acquisition, Citrix Acquiring Xensource, the next industry shaking acquisition is a fact. Red Hat has reeled in Virtualization startup Qumranet, While RedHat had already announced that they were going to support both KVM and Xen in their product range , taking over Qumranet for some people sounds like a really strange thing to do , afterall apart from its work on KVM as the underlying opensource component of their product, Qumranet is a pretty proprietary software company.

Qumranet understood that the Bare Metal Low Layer virtualization layer was not going to bring them any money any day soon. There were going to be different Free and free alternative Virtualization layers out there anyhow so why keeping theirs secret rather than having it flourish as a community product and contribute back to the linux kernel community while at it.

On the other hand the products of Qumranet were closed, altough based on Linux their business was in selling a VDI solution to bigger customers. The question now becomes how this kind of product range will fit into RedHat’s tradidional Open Source offering. Red Hat has a long history of opensourcing everything they do. Obviously there is Redhat Linux, Jboss but also
the proprietary directory server they bought from Netscape which they opensourced . Sometimes it takes a while, like with their Satellite product, but they have a good track record here. So most parts of the SolidIce product line will be opensourced , but will they grow a community ?

Lots of people ask themselves if RedHat was interrested in the VDI infrastructure or did the just want to have the KVM Kernel developers on board. The fact is that they have a direct entry into managing Windows desktops , a market previously closed for themAnd that makes it an interresting move. As of now, managing a windows box is just managing a file on a Linux server, easy to copy, easy to replace.

With RedHat clearly preferring KVM over Xen in the future. What’s going to happen with Xen in the other distributions.
The 451 group reports that
“Novell insists Xen is its hypervisor of choice and it remains committed to the virtualization software and project.”,
but as we all know .. Novell will be working on other interoperability challenges too.

With Oracle’s Unbreakable Linux being a RedHat derivate the future of Virtualization in Unbreakable becomes an interresting topic.
Oracle clearly choose the Xen platform as their favourite virtualization technology earlier. And given the fact that it will be hosting the next
North American Xen summit , Oracle seems to plan on continuing to build their platform on Xen.

To close of there’s also the question of people at Qumranet, Qumranet was cofounded by serial virtualization enterpreneur Moshe Bar who previously had also cofouned Qlusters and Xensource What’s he going to do , will he stay around at RedHat or will he refocus to his other startup Sullego.

In a couple of weeks Xensource will celebrate it’s first anniversary at Citrix , let’s see what happens then …

We look forward to the real product innovations (is Cisco going to surprise us?). Judging from the amount of PR announcements we received, you can surely bet on a Virtualization product avalanche rolling over Las Vegas next week. VMWare is expected to release/announce ESX v4.0, with plenty of exiting features (continuous availability, alarms on physical hardware faults, 64bit kernel and COS and more). Information overdose guaranteed, especially with absent competitors, trying to spoil the VMware annual party, by hijacking some of that overal media focus on Virtualization.

VMware hired the prestigious design agency Cahan & Associates and they came up with edgy creations that underline customer ‘references/quotes’ and are supposed to make us all connect at a very human level. If you are into ‘minimalist cool’ and like the artwork too, you will be happy to learn that you can order your own illustration styled photo at YouAreArt. Simply sent your picture, receive a draft after 2 weeks, give the artist feedback and get an original canvas within another 2 weeks.
For the DIY die-hards or those with graphic insight, there is good news too, as they can easily assemble their own illustration styled avatar at FaceYourManga for free.

VMworld promises to be even bigger than last time (wear comfy shoes!) and all sorts of contractors and vendors are very busy gearing up The Venetian’s many meeting rooms: setting up banners, signs, booths, networks, registration desks, 38 Wifi hotspots, labs, etc…

Try not to spend all your money on the gambling floor, as over 200 exhibitors would like you to buy some of their latest products too

Here is to a great VMworld 2008 and a lot of fun!

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Tarry is hinting at a “big” announcement that Citrix will make on september 15th. He reveals nothing, apparently having signed an NDA, but hints that the news concerns his topic of focus of lately.

Tarry’s blog recently shifted from pure virtualization news to reports on virtualization and cloud computing. So our bet is that Citrix will be jumping on the “Cloud Wagon”, or should we say “Cloud Hype” somewhere next week. And why shouldn’t they?

(Update: one of our commenters suspects an acquisition of some sorts, and that’s not unlikely.)

Citrix has been in the business of remotely accessing applications and managing such environments since they started out, so it makes perfect sense for them to actually tebrand their whole product line from Citrix to Xen … and then to “XenCloud”.

Oh, and Intel obviously will announce a new chip, called the CloudCore, no more need to buy an octocore CPU, Intel will instead host them for you.

On the other hand: given next week’s VMWorld event, Citrix and Intel might also be announcing some real news to steal some of VMware’s thunder.

What’s your guess?

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Mass High Tech is reporting on a new virtualization startup, currently in stealth mode, who is readying a public launch in the field of ‘laptop virtualization’ (for lack of a better term).

Update – per their blog: they’ve launched.

Westford-based Old Road Computing plans to publicly launch as Virtual Computer Inc., but isn’t revealing many specifics about its virtualization product, nor when it will be released. The company was founded in 2007 by Alex Vasilevsky (ex-CTO and founder of Virtual Iron) and Dan McCall (former Verisign executive and well-known consultant), both 25+ year veterans of the Boston technology community. The company is funded by top tier investors including Highland Capital Partners and Flybridge Capital Partners (formerly IDG Ventures, Boston). To date, it has raised $6 million in a Series A round of financing.

The software would be designed to isolate a laptop’s four major components — hardware, operating system, applications and user data — and create versions on the laptop of those components that operate remotely, without a network connection. The software would operate transparently for the user and it would enable wholesale security updates and other types of upgrades when connected to the network. Isolating the portions of the system enables it to limit access to work-related applications while enabling users to install their own personal preferences on the device.

Virtual Computer ( blog) is targeting laptops because that segment is growing faster than stationary desktops, according to the company.

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According to a report from the Wall Street Journal, stocks of both NetApp and VMware have been trading at unusual volumes yesterday.

Trading in NetApp spiked to four times the normal level, with investors picking up 38,000 calls that allow them to buy the company’s stock and 5,000 puts that allow them to sell it. NetApp shares closed at $25.55, up 6.1%.

Fueling activity in VMW trading was the recent chatter that Cisco could be interested in acquiring VMware. With calls outnumbering puts by seven to one, traders gravitated to September $45 calls. The contracts are priced at 70 cents and make money if VMware shares jump above $45.70.

They closed at $38.49, up 4.1%.

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We were looking at the swirling rumors coming in about a potential acquisition of Red Hat by VMware, and ultimately decided not to cover the rumor because … well because it seems so irrational.

But is that actually so?

This is what BusinessWeek wrote:

Speculation is rife that the company (Red Hat) is a takeover target. “It makes no sense that they’re still hanging out there,” says Eric Gebaide, a managing director at investment bank Innovation Advisors.

One possible suitor is virtualization software company VMware, which some industry executives says is on the lookout for an operating system to add to its portfolio. Former VMware CEO Diane Greene, ousted by her board in July, had set up meetings with Red Hat in part to position VMware as friendly to open source and possibly as a prelude to a buyout discussion, according to a person familiar with the conversations. Representatives of both companies declined to comment.

Ostatic followed up with a snapshot analysis, and now the folks over at Cnet News.com are trying to make sense of such an acquisition.

Ostatic concludes in its post:

A combination of VMware virtualization and a proven, popular operating system could pave the way for a future of healthy competition for VMware with other operating systems that bundle virtualization. I wouldn’t be surprised to see both VMware and Red Hat pursue all of this.

Meanwhile Cnet’s Matt Asay contradicts:

I would think this trend cuts the other way. Red Hat (and Novell) likely see virtualization’s commoditization as a reason to push the knife deeper into VMware. Being acquired by an important but commoditized feature of their operating systems doesn’t sound appealing to me…

What do you think?

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This is one rumor that just keeps coming back: Reuters is reporting that EMC shares rose as much as 6.3 percent yesterday on market speculation that the world’s largest maker of corporate storage equipment could be acquired. The company stills holds a majority stake in virtualization juggernaut VMware.

Shares of EMC rose as high as $14.92 in trade on the New York Stock Exchange, before retreating to $14.75 in afternoon trading.

EMC spokesman Dave Farmer declined to comment, saying the company never responds to market rumors or speculation. Pacific Growth Equities analyst Kaushik Roy said the most likely company to be interested in buying EMC would be Cisco Systems. Last May, we reported on rumors of a possible merger.

A popular phrase says there is fire where there is smoke, but we’re getting a bit skeptical. These rumors have been floating for years now, and although a Cisco-EMC combo would seem like a pretty logical combination, you can ask yourself if it why a deal would be in the works now, when a merger or full acquisition should have already happened if both companies and their shareholders agreed.

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So VMware performed below expectations, but how did parent company EMC do the past quarter? Not too shabby, actually. In its Q2 Earnings conference call (see transcript here), the company outlined that it had performed well against the backdrop of a challenging economic environment, although its outlook for the future was less rosy.

In the second quarter, EMC had revenue growth of 18% (to $3.67 billion), a non-GAAP EPS growth of 20%. EMC’s second-quarter net income rose 13% to $377.5 million, or 18 cents per share, from $334.4 million, or 16 cents a share, a year earlier. EMC backed its January forecast of full-year profit of 78 cents per share, excluding items. It said 2008 revenue would exceed $15 billion, up from its previous outlook of $15 billion.

The results sent EMC shares up a few points, and they got a further boost when EMC opened the door to a VMware spinoff, per report by Reuters. EMC CEO Joe Tucci apparently stated in an interview with Reuters that a VMware spinoff is definitely possible, although it likely wouldn’t happen in 2008.

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Update: you might want to read this article about VMware co-founder Diane Greene leaving VMware before you read this post. Come back, though

Financial analyst Thomas Curlin of RBC Capital Markets upped his rating on the EMC stock to “Outperform” from “Sector Perform”, even as it trimmed the stock’s price target from $21 to a more modest $19. The focus of his call: the prospects for a spin-out of the company’s stake in VMware.

Curlin notes that the company can spin out VMware to shareholders with minimal tax implications starting in early 2009. In his research note, Curlin writes:

“Management recently has suggested it does not plan to spin out VMware, but if the stock remains at current levels, we believe it could be forced to do so by activist shareholders. This possible scenario is a key aspect of our recommendation upgrade as it provides downside protection in a challenging macro context.”

Curlin figures that EMC is trading at a value of about $6.25 ex its stake in VMW; but he thinks the non-VMW business is worth $10-$14 a share. Shares of EMC closed at $15.05.

[Source: Tech Trader Daily]