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Microsoft To Buy Connectix's Virtual PC, Other Virtual Products

Microsoft To Buy Connectix's Virtual PC, Other Virtual Products

by , 6:15 PM EST, February 19th, 2003

The news that is all the rage today is that Microsoft is buying Connectix's main software properties, the Virtual line. Virtual PC and Virtual Server will both make their way to Redmond, including much of the development team. Connectix itself will remain as a standalone company, and will continue to sell its other products.

It has been rumored for many weeks that this acquisition was in the works, and the main impetus for said acquisition is Virtual Server. That product allows multiple servers to run on one machine, and is a growing area in the server market. It's also a market where Big Redmond doesn't even have a foothold. Virtual PC, it would seem, is the icing on the cake, and one that will add substantial revenue to the company's Mac Business Unit. That's a simplistic look at the complex issues in play, but one that cuts to the heart of the matter.

Details from a C|Net article:

The two companies had been in talks for many months, said Kurt Schmucker, vice president of Mac products for Connectix.

The future for Connectix, and for the products that Microsoft did not acquire, is somewhat unclear. For the next six months, the company's main focus will be the "graceful transition" of the virtualization products to Microsoft, although Schmucker said the company will still support and sell its other products, such as RAMDoubler. "After six months, we don't know yet," said Schmucker, who is among the many workers joining Microsoft.

Members of the quality assurance, development and product management units are joining Microsoft immediately, while other employees may make the switch after the transition period. San Mateo, Calif.-based Connectix has about 100 employees, Schmucker said.

Representatives of the Redmond, Wash.-based software giant said Virtual PC for the Mac will continue to be sold and that Microsoft plans to continue developing the software, which has more than 1 million active users. A Microsoft executive said the company did not purchase the software to kill it, nor does Microsoft plan to stop developing its native Macintosh software, such as the Mac OS X version of Office.

"Mac OS X applications (are the) best solution for heavy access to applications (like Office)," said Tim McDonough, director of marketing for Microsoft's Macintosh Business Unit. "Virtual PC just takes that to the next level--you can now be compatible with applications that only run on the PC."

In a statement, Apple praised Microsoft's move.

"Adding Virtual PC to its product portfolio is yet another example of Microsoft's continued commitment to the Mac platform," said Ron Okamoto, Apple's vice president of Worldwide Developer Relations. "Virtual PC has helped people who want to own a Mac but need to run legacy PC applications. We're glad to see Virtual PC go into such good hands."

"I think it's a great move for Microsoft," IDC analyst Al Gillen said. He noted that Microsoft had been "noticeably absent" in the virtualization arena. "I would think this is the start of a bigger effort in this space for Microsoft," he said.

There is a lot more information in the full article from C|Net.

The Mac Observer Spin:

Doom and gloom! We can hear that echoing around the virtual walls throughout the Internet, accept from those on the anti-Mac side who think this is somehow entertaining. Our take is that both camps are wrong. Microsoft likes Virtual PC because it allows the company to sell Windows licenses to people who would otherwise not be able to buy them. Remember, MS doesn't make boxes, at least not yet, and cares mostly that Office and Windows will be running on whatever system you do have. No, Virtual PC is safe, and could easily benefit by the additional resources that Microsoft can throw at it.

As such, the only other company we think that would have been better for the Mac platform to have bought VPC would be Apple itself. That isn't likely, as Apple tries hard to make the Mac platform into one that is perceived as being all that you need.

In the meanwhile, we look forward to whatever new products the proceeds from this sale will help finance. Connectix has been an outstanding member of the Mac developer community, and we are very interested in what comes from this.

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