Well, the ink is barely dry on the new money minted during the VMware IPO yesterday, and that's already so Aug. 14th. Today, the news is that Citrix is acquiring XenSource for a paltry $500 million.

Paltry? Half a billion dollars might seem like a chunk of change, but note that EMC spent more than $2 billion a year ago to acquire RSA. Cripes, EMC spent around 35 percent more (or $675 million) when it acquired VMware in December of 2003.

Better yet, Citrix is probably getting a better bargain than investors. Our Steven J. Vaughan-Nichols yesterday called the VMware flotation an Idiotic Public Offering, arguing that the public is paying a premium for a minority stake in a company that doesn't dominate the market and will probably be overtaken by an open-source vendor like... Xen.

Another interesting twist to keep in mind: Citrix is one company that has apparently mastered the difficult art of dancing with bears. It has managed to become profitable while working with Microsoft for years, a feat that has eluded many.

Now, the relationship between Citrix and Microsoft is very pertinent to the Xen acquisition. In what way? Well, last week, Sam Ramji, the director of Microsoft's open source software lab, gave a presentation at LinuxWorld Conference where he said that Microsoft had no plans to optimize virtualization of Windows on top of Linux.

The odd thing is that it sounded as if Ramji were also hinting at some kind of licensing arrangement with Xen that could make such a thing possible in the future.

But given what we know now about the intertwined fates of Xen, Citrix and Microsoft, I think he might have been inadvertently leaking the fact that Xen would soon be more Microsoft-friendly.

My understanding is that Xen's flavor of virtualization lets virtual machines write directly to the hardware (rather than through software emulation). That would mean that, in effect, Microsoft would have needed to produce a "Xen-aware" version of the OS before it could run in that mode. The Citrix deal could remove that roadblock, which is what Ramji might have been hinting about.

What happens next? The beauty is that that's anyone's guess. Care to take a shot?