Greetings from sunny Cannes, where a team of us from Virtual Computer is in town for VMworld Europe 2009.  We weren’t really sure what the turnout would be given the state of the global economy and the corresponding pressure on IT travel budgets.  However, we were pleasantly surprised by a strong showing by both exhibitors and conference attendees.

The biggest news of the show so far has been VMware’s announcement with Intel to collaborate on bare metal client hypervisor technology.  It made a pretty good splash though many (myself included) are viewing it as a bit of a “me too” announcement given the Intel partnership that Citrix announced back in January in conjunction with their Project Independence initiative.  As a startup, the first instinct is to get a bit nervous when larger industry players begin to jump into your sandbox.  However, in our case it has provided tremendous validation of the technology model we have been focused on since 2007.  Both the Citrix and VMware client hypervisor announcements have generated tremendous inbound interest in Virtual Computer, since many recognize that we have a pretty significant lead in the race to deliver centralized PC desktop management using bare metal client hypervisor technology.

I was excited to be invited by Virtual Strategy Magazine to contribute some of my perspectives on the VMworld Europe festivities as part of their event coverage.  I have tried to keep these posts a bit more vendor-neutral than my posts here on the Virtual Computer blog, and hopefully they provide a good general flavor for what is going on at the show.  Visit Virtual Strategy’s VMworld Europe coverage center for reports from me and other contributors in attendance.

When the topic of virtualization comes up, there are really only four companies that come to mind: Citrix, Microsoft, VMware, and Virtual Computer.  Right? 

The folks at SAP recently finalized the agenda for their upcoming SAP Virtualization Week 2009, scheduled for April 20 – 23 in Palo Alto, CA.  One of the highlights of the event will be a panel discussion that will feature our own Alex Vasilevsky along with Simon Crosby of Citrix, Mike Neil of Microsoft, and Steve Herrod of VMware.  I am guessing that it will be a lively and entertaining discussion.

The event agenda and registration details can be found on the SAP web site.  The SAP event timing and location lines up very well with the IDC Virtualization Forum West if you happen to be attending that event.  Travel budget in shreds on the floor?  SAP is also offering an option to view a webcast of the event via Citrix GoToWebinar.

Ever wonder what announcing a $15 million fundraising round in the middle of a recession would do for your web traffic?  It would probably look something like this:

The apex of the chart is Monday and Tuesday of last week, both of which shattered our previous record for daily unique visitors that dates back to our company launch from stealth mode last September.  While I hid the numbers, the baseline traffic we were getting previously was very respectable, so the announcement clearly made a big splash.

The bulk of the traffic to the site last week resulted from the great press coverage our announcement generated.  Kudos to Kyla Kenney, our PR guru, for doing a great job getting the word out to press and analysts, and a thank you to Andy Cohen and the Citrix team for assisting with our press activities.

We have become a bit addicted to watching the web stats go up, so I guess it’s up to us now to keep the excitement about Virtual Computer and NxTop growing.

OK, I don’t break out the Han Solo quotes for just any occasion, so clearly something big is happening at Virtual Computer today. Earlier this morning, we made a major announcement that we just closed a $15 million series B financing round, which is big news in itself given the state of the global economy. However, equally significant is who is investing in the company. Our existing investors, Highland Capital Partners and Flybridge Capital Partners, doubled down on Virtual Computer, and we also welcomed in an exciting new strategic investor, Citrix Systems.

The addition of Citrix as an strategic investor is absolutely huge for us. I have already commented on the significance of the Citrix/Intel client hypervisor initiative and Project Independence and how they collectively stand to revolutionize corporate computing. An industry standard Xen-based hypervisor will dramatically accelerate Virtual Computer’s mission to refine PC management through client virtualization, and having two industry titans like Citrix and Intel throw their weight behind the client hypervisor model will only speed its adoption and acceptance.

Whenever the big guys jump into an emerging new technology area, there is always risk that the innovative startups who were there first will be squeezed on to the sidelines. An investment by Citrix signals that Virtual Computer’s unique vision and collection of important technology innovations have earned us a key seat at the table as these industry developments unfold in the months and years ahead.

With all of the excitement about the Citrix relationship, it is easy to overlook the significance of a $15 million infusion of capital into Virtual Computer. We have already been moving at a very good clip to outrun and outexecute potential competitors big and small, but this additional investment, which brings our total funding raised to date to $21 million, allows us to engage the hyperdrive on our go-to-market plan. It couldn’t have come at a better time as the client hypervisor / PC lifecycle management convergence we have been predicting is clearly heating up.

Traveling at light speed it not easy. As Han warned, without careful calculations you can fly right through a star or bounce too close to a supernova. However, you can’t win if you are not in the game, and I have to credit our co-founders, Dan McCall and Alex Vasilevsky, for coming up with a winning business plan and technology vision, building a winning team capable of making it a reality, and effectively steering a rocket ship that is moving faster than any of us imagined possible.

There has continued to be great coverage and response to the Citrix/Intel client hypervisor and “Project Independence” announcements.  We have been keeping pretty busy over the last couple of days talking with press and analysts about our perspective on these industry developments, and it is already very clear that Citrix and Intel’s involvement is going to bring a whole new level of visibility to the ecosystem of companies working hard to make bare metal client hypervisor technology a reality.

Chris Wolf of Burton Group is one of the industry analysts who was way out in front of the client hypervisor’s emergence as a PC management technology, and he provides a very good assessment of the Citrix/Intel announcement on his blog.  In his post, Chris put out the call to other companies like Virtual Computer and VMware to comment.  So far, it looks like I am the only one who has weighed in.  Here is what I had to say:

At Virtual Computer, we are cheering this announcement, because it completely validates our vision of transforming the way PCs are managed through client-side virtualization. We also view Citrix as a very partner-friendly company that we can be successful collaborating with as part of a broader industry ecosystem. Since day one, Virtual Computer has described itself as a PC lifecycle management company—not a hypervisor company. If you go back and read our original press release when we came out of stealth mode, a lot of shared vision with Project Independence shines through.

We have implemented a Xen-based bare metal client hypervisor as transformational technology to help us achieve our vision for PC management. However, we never had any illusions that we would always own the hypervisor. If a standard or de facto standard client hypervisor existed, we would have used it. Given that one didn’t, we looked at available options such as Xen, KVM, etc. before ultimately deciding that Xen was the most mature technology available to serve as the “engine” of NxTop Engine. However, we went into it recognizing that just because a bare metal client hypervisor standard did not exist, this did not mean that there never would be one. At the time, many were predicting that Microsoft would include a bare metal client hypervisor as part of Windows 7. In addition, we also saw it as plausible that companies like Citrix and VMware would augment their server-hosted VDI offerings with a client hypervisor (though I would not have predicted so quickly!).

With that as the backdrop, we built NxTop around Xen, but with clear lines of delineation between our management technology/intellectual property and the hypervisor. We were never planning to monetize the hypervisor, and any improvements we make to Xen will go back to the open source community in a timely manner. If at some point, a better client hypervisor option than Xen emerged, we were well prepared for it. However, to the extent that Xen emerges as the industry standard client hypervisor, as the industry momentum is starting to foretell, it makes Virtual Computer a much more valuable member of the ecosystem given our expertise and head start. I also think that an ecosystem and standards driven approach, bolstered by the Xen open source community, has much better potential to achieve widespread adoption than a proprietary hypervisor approach from which only one company stands to gain.

The client hypervisor train is clearly picking up a head of steam this week, which is making life very exciting for innovative startups in the space like Virtual Computer.  That’s us waving from the front row!

Citrix Systems made multiple major announcements today centered around making Xen a ubiquitous bare metal client hypervisor for PCs.  Among the announcements:

• A partnership with Intel to bring Xen-based hypervisor technology to millions of Intel-based PC platforms.
• Project Independence, an exciting vision for how client virtualization will transform desktop computing.

As you might expect, Brian Madden put together a solid overview and assessment of the announcements over on his site.

At Virtual Computer, we see these industry developments providing tremendous validation of our approach of using client virtualization technology to redefine desktop computing in a way that is better for IT professionals and better for end-users. The reason we chose to use Xen as the foundation for NxTop Engine, our bare metal client hypervisor, is that we felt that it would take an industry ecosystem and the added leverage of the open source community to realize such an ambitious vision.

The technical challenges of deploying a bare metal hypervisor on a end-user PC are very different from the requirements for servers performing backend data center workload.  While we have overcome a great many of these challenges on our own, working with the open source community has already yielded significant advantages as we set out to complete against companies like VMware who have substantial resources but are constrained by their use of a proprietary hypervisor.

A major push, led by Citrix and Intel, to make Xen the de facto standard client hypervisor technology will provide even greater advantages to small but innovative ecosystem players like Virtual Computer.

Chris Wolf from Burton Group did a nice wrap-up post on the virtualization panel at the Catalyst Europe conference that featured our CEO, Dan McCall.  We were pleased that virtual machine interoperability was a key topic of discussion.  This is an area that is near and dear to us.  Chris highlighted the fact that Citrix has taken steps on the server side to make virtual machines created on XenServer capable of running on Microsoft Hyper-V without conversion.

These types of initiatives are extremely positive in our view, as anything that makes life easier for corporations to deploy virtualization in multi-vendor environments is ultimately good for all of us.  Each virtualization vendor would love to “own” an account, and the customers themselves would likely prefer to standardize on a specific virtualization technology.  However, the reality is that vendor relationships evolve, companies acquire other companies, and IT environments ultimately end up looking a bit more complex than anyone would prefer.

At Virtual Computer, we have been focused on interoperability since day one.  We felt it was necessary to deliver a solution to the marketplace that would interoperate with major virtualization platforms natively without conversions.   We incorporated into our client-optimized bare metal hypervisor full, conversion-free interoperability with Microsoft virtualization technologies such as Hyper-V, Virtual Server, and Virtual PC.  We are also very pleased by the efforts going on in the DMTF and the virtualization industry to define a common interchange format – OVF – that would facilitate interoperability between various virtualization platforms.

Bottom line people should stop obsessing about choosing the “right” virtualization technology – interoperability between platforms removes the angst of the decision.  And at the end of the day virtualization technology is just that – a technology; and what kind of solution one delivers with that technology is what really matters the most.