Red Hat acquires Qumranet, suddenly becoming a key virtualization player

Red Hat just announced that it acquired the VDI startup Qumranet for $107M.

The startup left the stealth mode in September 2007 and has just 60 employees, all of them will keep their work as Red Hat employees.

The move is critical and has a major impact on many aspects of the virtualization world.

The Qumranet strategy
Qumranet offers an interesting VDI solution made by a  management console, a connection broker and a new remote desktop protocol.
But more than that, Qumranet maintains KVM, the new virtualization platform that has been implemented in the Linux kernel after just six months of development.

KVM allows any Linux box to become a virtualization platform, and KVM is the only company at the moment able to offer a VDI solution for KVM.
This means that customers looking for cheap, large-scale virtual desktop infrastructures have to buy the Qumranet solution.

The Red Hat strategy
In the last few years, despite a number of announcements, Red Hat didn’t demonstrate a neat strategy about virtualization. But in June the company officially declared its intention to move from Xen to KVM.

Just two months after, a Red Hat executive formally revealed the company interest in VDI. At that point it was easy to forecast a special deal with Qumranet.

(it seems that when presumed the acquisition, the deal was already signed)

Buying Qumranet Red Hat just solved a number of problems:

  • obtaining direct control on the development of a virtualization engine (something that the company was never able to do with Xen because of XenSource, and even less after XenSource was acquired by Citrix)
  • obtaining a platform which is ready for virtualization ubiquity (KVM is flexible enough to be deployed on servers, desktops, embedded devices and anywhere Linux can fit)
  • obtaining a strong position in the growing VDI market
  • differentiating its virtualization offering from the competitor Novell (both are currently adopting Xen)
  • enforcing its position of open source leader while the competitor Novell is seen as a suspicious Microsoft ally

The impact on the market

Both Citrix and Red Hat acquired a virtualization company that develop and control an open source virtual machine monitor (VMM). But there’s a major difference between the two companies.

Citrix never had an involvement in the open source world, and despite the culture introduced by Simon Crosby and his staff (and their tireless efforts), the community has a hard time in recognizing Citrix as a company that can give back. When talking about virtualization Citrix is first and foremost seen as the best Microsoft ally against VMware.
Red Hat instead is a beloved, open source paladin. The company made some mistakes in the past, but its effort in supporting Fedora still makes it a leader in the Linux world.
This difference is now specially important: some entities currently contributing to the Xen development may find much more interesting to work with Red Hat rather than with Citrix (think about IBM).

At the same time some firms heavily relying on Red Hat (think about Oracle), may be in deep trouble now that the company is definitively replacing Xen with KVM.
These entities may need to look at Novell now, or start working on their own implementations.

In any case the acquisition of Qumranet is a major achievement for Red Hat, which has now a unique opportunity to become a real virtualization leader.