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05 Sep 2008
Open source software vendor Red Hat has beefed up its virtualisation offering by snapping up specialist vendor Qumranet for $107m (£60.5m).
Red Hat claimed it does not expect the deal to affect its revenue for the current fiscal year, which closes at the end of February 2009. During the following year, however, the open source giant said the purchase would generate a $20m spike in revenue.
Qumranet offers a range of virtualisation products including its Kernel Virtual Machine (KVM) platform. The vendor also offers a virtual desktop infrastructure (VDI) product called SolidICE.
Red Hat claimed it expected quarterly operating expenses to be about $4m before non-cash stock-based compensation expenses, amortisation expenses and other charges relating to the acquisition's closure. Red Hat paid for the Israeli firm in cash and UBS Investment Bank acted as the company's only strategic advisor for the deal.
The deal will allow Red Hat to provide virtualisation to its open source customer base as well as to Windows users. The vendor claimed it can differentiate itself from pure virtualisation vendors by providing a more comprehensive offering which allows customers to keep IT costs down.
Red Hat chief executive Jim Whitehurst said: "Red Hat customers enjoy highly responsive, flexible and cost-effective IT infrastructures. This acquisition furthers our capability to widen the gap between open source and proprietary infrastructure software. Put simply, Qumranet's KVM and VDI technologies are at the forefront of the next generation of virtualisation. They represent an opportunity to raise the bar and meet the market's demand for virtualisation solutions."
IDC research analyst Michael Rose added: "With this acquisition, Red Hat has clearly positioned itself as a competitor within the Virtual Desktop market. KVM not only represents a competent platform for hosting virtual desktops and other workloads, but protocols such as SPICE will increase the performance that users can expect to experience from their server-based computing environments, making the platform viable for a larger set of users."
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