"The only clear opportunity is right now before Microsoft enters the market," Bittman says. "After Hyper-V comes out, I wouldn't expect Citrix to be aggressive in server virtualisation. Microsoft has deeper pockets. I don't see how Citrix can compete."
Citrix's business plan includes more than server virtualisation, though, with Citrix promoting its XenDesktop software as "the best way to deliver Windows desktops."
Nemertes Research contends that the Citrix buy will lend "significant financial and marketing muscle to XenSource" in its bid to compete with VMware, and that fiercer competition will lead to more innovation in virtualisation technology.
DiDio, for one, does not see Microsoft de-emphasising its partnership with Citrix. "Microsoft needs Citrix in this thing as much as Citrix needs Microsoft," she says. "Citrix has wonderful desktop virtualisation, wonderful storage management. Microsoft is late to the market on a lot of this stuff."
Microsoft "absolutely" will continue working with Citrix, Microsoft's Adam says, noting that the companies announced a deeper partnership on desktop virtualisation earlier this year. As a result, Citrix will develop a desktop connection broker that will enable centralised desktop management for Windows shops, he says.
The Xen hypervisor provides the foundation for Sun's x86 virtualisation product, known as xVM. Sun isn't alone here; practically every one of VMware's major competitors uses Xen, including Oracle, Novell, Red Hat, Virtual Iron and Citrix. Each is doing work to make sure the Xen hypervisor is more robust, but more importantly each is trying to differentiate itself with management tools, Bittman says.
Bittman thinks Sun poses VMware the second-biggest threat behind Microsoft. "My view is if Sun doesn't do it, it's going to be a two-horse race," he says.
The virtualisation market is largely untapped; only about 10 percent of servers are virtualised. VMware and Microsoft could win nine out of every ten customers and there would still be a sizable chunk available for Sun, not to mention Citrix and other competitors, analysts say.
"There's lots of room for lots of companies to grow in this arena without impacting VMware's market share," says analyst Charlie Burns of Saugatuck Technology.
Sun typically has not done well in the software market, but Bittman is optimistic because virtualisation is pretty close to Sun's expertise - managing hardware.
"Managing virtual machines, it's really just one step above managing the hardware itself," Bittman says. "We consider Sun to be a dark horse. The proof has got to be in the execution."
Sun's xVM is a set of technologies for both desktop and x86 server virtualisation. Sun also has a SPARC hypervisor for its own hardware. Sun bolstered its virtualisation portfolio a few weeks ago by purchasing Innotek, which makes desktop virtualisation software targeted at developers who want to build, test and run applications on multiple operating systems.
"Their real strategy is, of course, built around the Solaris operating system, virtualising Solaris," DiDio says. "Their approach is they have these zone containers. It gives you isolated execution environments within Solaris."