In the mid-1990s, with its WinFrame and Metaframe software for deploying Windows programs from a server-based console, Citrix made controlling systems simpler and more cost effective. For the last seven years the company has been and has grown revenues to almost US$1.4bn (£750m) for its last financial year, moving from the status of single-product company to broader player that spans conferencing, remote -access, network optimization and security.
Most recently, Citrix has been moving into the rapidly growing virtualization space with the acquisition of . The deal raised eyebrows as Citrix spent about $500m even though Xen had almost no revenues and used open-source technology as the basis for its programs.
Even if XenSource has little in the way of income, the deal is strategic nonetheless as virtualization provides a very powerful way to manage system resources, provide failover and deploy applications.
Templeton defends the transaction, saying that it provides Citrix with broad virtualization capabilities.
"I've visited [XenSource in the UK] and the scientists are just amazing," he says. "The hardest part is that the valuation can't be related in any way to the previous 12 months. [You can only justify the price] by the technology and the people talent. That's the only way you could get to $500m, [but XenSource] gives us a stake in virtualization all the way down to the bare metal, and depth all the way from the desktop to the datacenter."