More Virtualization Deals in the Works?

August was an active month for the virtualization software market, with the IPO by VMWare (VMW) and XenSource being acquired by Citrix. That momentum may continue in September, as there are reports that another deal is in the works. The Inquirer reports that SWSoft is planning to acquire Sphera, an Israeli company that specializes in management tools for software as a service (SaaS) apps. The deal is said to be part of a move by SWSoft to raise its profile and focus on data center management, which is a hot niche in the wake of HP's acquisition of Opsware (OPSW) and a successful IPO by BLadeLogic (BLOG).

SWSoft is perhaps best known in the web hosting sector, where its Virtuozzo is one of the leading products for creating virtual private servers (VPS). But the company has clearly been gaining traction in the enterprise market as well. SWSoft says more than 700,000 virtual environments are powered by Virtuozzo, and more than 600,000 physical desktops and notebooks use its popular Parallels virtual machine software. Last month the company said its revenues grew by 127 percent for the first half of 2007 versus the first half of 2006. CEO Serguei Beloussov told the Inquirer that his company is closing on "several" acquisitions.