Microsoft Buys Calista, Joins With Citrix to Take On VMware
By Dina Bass
Jan. 21 (Bloomberg) -- Microsoft Corp., the world's largest software maker, bought Calista Technologies Inc. and expanded a partnership with Citrix Systems Inc. to compete in the growing market for so-called virtualization technology.
Microsoft is seeking a larger role in virtualization, which lets a single server or personal computer run multiple operating systems at once. Closely held Calista's programs help those systems run faster, said Shanen Boettcher, a general manager in Microsoft's Windows group.
In three years, more than 30 percent of server computers will use virtualization technology, up from about 5 percent now, said Larry Orecklin, a Microsoft general manager. The software reduces costs for equipment, maintenance and energy. Microsoft is trying to catch up with VMware Inc., which leads the server portion of the market, by enhancing its Windows Server product.
``We want to drive adoption from a fairly early market to something that is much greater,'' Orecklin said.
Calista was founded in 2006 and is based in San Jose, California. Terms of the acquisition weren't disclosed.
Microsoft will also work with Fort Lauderdale, Florida- based Citrix to make their server-virtualization products work together, enabling both companies to sell more copies of related products, Orecklin said.
Microsoft will announce the deals at an event in Bellevue, Washington, for 400 early customers for its server virtualization software, Hyper-V. The company will release that product six months after the February introduction of Windows Server 2008.
Price Cut
The Redmond, Washington-based company also cut in half the price of a Windows Vista operating system that runs individual PCs from a single server computer. Vista Enterprise Centralized Desktop, introduced in April, will now cost $23 a user per year.
Microsoft also sells software that lets companies run applications such as Word and Excel on individual machines without having to install them. Instead, the programs are run from a central server.
In the three quarters that software has been on sale, Microsoft has sold copies for 4 million users, said Boettcher. That makes the product the most popular of its kind and the fastest growing business-software product in Microsoft history.
Microsoft acquired the product with the purchase of Softricity Inc. last year. Up until then, Softricity had only sold a total of 270,000 user licenses. Palo Alto, California- based VMware purchased a company called Thinstall on Jan. 15 to add similar products.
To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net
Last Updated: January 21, 2008 13:36 EST
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