Citrix to acquire XenSource for $500 Million

In confirmation of some suspicions and rumors that have been tossed around the past week, thin-client giant Citrix has confirmed that they will be purchasing XenSource.

Citrix also announced the financial impact behind the acquisition, and will be claiming XenSource for the modest sum of $500 million. That's quite a chunk of change, a lot more than you'd expect a company of XenSource size to be worth – with only $8 million in expected sales for 2007. Citrix sees a lot of growth potential for the company, however, to a value of several billion:

This acquisition moves Citrix into adjacent server and desktop virtualization markets, expected by Citrix to grow to nearly $5 billion over the next four years.
Interestingly enough, Citrix has also stated that this will bring them closer together with Microsoft and the Windows platform. Considering that Microsoft is directly entering the virtualization market with Viridian, you'd think there would be a conflict of interests here. Could more be in the works?

You can read the full press release at the Citrix site.