Quoting from Barron’s:
CRT Capital’s Ashok Kumar offers a provocative take this morning about Citrix’s (CTXS) plan to take on VMware (VMW) in the virtualization market by acquiring XenSource for $500 million.
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Citrix’s acquisition of XenSource is an exploration of how a successful software company has underestimated the difficulties of entering a tangential market,” he writes. “Half a billion dollars is just the beginning of the investment Citrix will need to pull off its vision of a working system software ‘stack.’ Ironically, the ‘stack’ is meaningless to customers. VMware’s success has nothing to do with a stack, but instead on the opposite concept – widespread partnering.
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Kumar notes that Citrix has forecast that the XenSource business can grow to $50 million a year in revenue next year from $5 million this year; he thinks that “it should feel happy if it achieves $15 million.”…
Read the whole article at source.