Microsoft Acquisition Furthers Virtualization Efforts (MSFT, VMW, CTXS)

March 12, 2008 by Douglas A. McIntyre

Microsoft Corp. (NASDAQ: MSFT) has announced its intended acquisition of Kidaro.  This is said to be a leading provider of desktop virtualization solutions for enterprises.

Microsoft noted that combining Kidaro’s virtualization with the "Microsoft Desktop Optimization Pack for Software Assurance" suite of desktop management tools will enable IT professionals to optimize desktop infrastructure.  That will be done by providing management capabilities for Virtual PCs, streamlining deployments and easing application compatibility issues.

Currently, VMware (NYSE: VMW) has the pole position in virtualization.  It enjoys that position by a wide margin on the enterprise level today.  It’s hard to imagine that VMware’s efforts so far to date will fall by the wayside even if Microsoft or others acquire anything and everything tied to virtualization, and VMware currently has a market cap of about $19 Billion even after a more than 50% drop from the post-IPO highs.  Citrix Systems (NASDAQ: CTXS) has made an acquisition of its own in virtualization, and you can read our interview with the CEO of privately held Virtual Iron to see what at least some other industry insiders are thinking.

Financial terms were not disclosed for the Kidaro purchase, and this appears to be an add-on acquisition to help in its existing virtualization efforts.

Jon C. Ogg
March 12, 2008

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