Parallels rejected acquisition by IBM and Microsoft, wants an IPO within two years

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At the end of April, a Russian business magazine reported about a $11M investment that Parallels secured from Almaz Fund, and unveiled how the company contemplated an IPO one or two years ago.

Now Bloomberg further confirms the interest to launch an IPO, reporting the words of Serguei Beloussov, the Parallels founder and CEO:

Parallels Chief Executive Officer Serguei Beloussov says he wants to take the software maker public in about two years, striving to stay independent.

More interestingly, Beloussov reveals how IBM and Microsoft started a discussion to acquire his company:

Companies including Microsoft Corp. and International Business Machines Corp. have “casually” approached him about an acquisition, Beloussov said in an interview last week.

The interest of Microsoft for Parallels isn’t surprising at all: in May 2006, at the Microsoft conference WinHEC, Bob Muglia clearly said during his keynote that Microsoft was going to provide all three major virtualization tecnologies in the Longhorn wave: server (or hardware) virtualization, OS partitioning and application virtualization.

Microsoft now has every piece of the virtualization stack: the Hyper-V hardware virtualization engine, the App-V application virtualization engine, a VDI connection broker, the security wrapper MED-V.
The only missing part is the OS partitioning technology, and Parallels is the only enterprise company that offers it at today.
So unless Microsoft changed its plans or what to develop it from scratch, Parallels is the company to acquire.

The fact that IBM is interested in acquiring Parallels is much stranger. It may mean that the big OEM is finally reconsidering its market strategy and may soon start to focus on the x86 virtualization market.

If the IBM interest for Parallels is real, it means that the Big Blue may move to acquire more than just the OS partitioning layer. And Red Hat would probably be much happy to demonstrate its new KVM-based platform.