Open-source companies to watch

Company name: XenSource

Founded: January 2005

Location: Palo Alto, California.

What does the company offer? Server virtualization products based on the Xen open-source hypervisor. XenEnterprise, the company's first product, came out in December 2006.

Why is it worth watching? In a market dominated by VMware, smaller vendors like XenSource are poised to gain ground because hardware improvements designed by Intel and AMD have made it far easier to write virtualization software. As an open-source vendor, XenSource figures to attract customers looking to expand virtualization without paying hefty license fees.

XenSource is about to be acquired by Citrix Systems, which agreed to buy the company for US$500 million on Aug. 15.

How did the company get its start? Wall Street bankers urged Ian Pratt, leader of the Xen hypervisor project, to start a vendor that could meet their unique support and feature needs. The founders of the Xen hypervisor subsequently started XenSource.

How did the company get its name? XenSource was chosen because the company's product line is a natural extension to the Xen project.

CEO and background: Peter Levine was a managing director of the Mayfield Fund before joining XenSource, and has more than 20 years experience in software organizations, including Veritas Software and MIT's Project Athena.

Funding: Venture capital (amount not disclosed) from Ignition Partners, NEA, Kleiner Perkins Caufield & Byers, Sevin Rosen and Accel.

Who's using the product? More than 500 customers, including Harvard University, Palm, AmerisourceBergen, and the Miami Herald.