Virtual Computer - Another Citrix Target???

Citrix is betting on a desktop virtualization start-up called Virtual Computer, which was founded in November 2007, to focus on the provisioning, publishing and patching of desktop and laptop operating systems. Virtual Computer, whose NxTop software is in beta and is based on open source Xen software, announced Citrix as a key investor.

Virtual Computer has snagged $15 million in a funding round led by Highland Capital Partners and Flybridge Capital Partners. Citrix continued an undisclosed but "significant" portion of the $15 million, says Virtual Computer CEO and co-founder Dan McCall.

"This is an interesting and exciting young company and we have a shared vision abut what's going on in the space," says Andy Cohen, Citrix's senior director of strategic development. "We think it's important to help support people who are coalescing around Xen-based technologies."

When asked if this might be the first step toward acquiring Virtual Computer, Cohen said, "We own a small percentage of them now. Because of the shared vision ... that's certainly a possibility."

Virtual Computer's NxTop software is a bare metal, or "Type 1" hypervisor, whereas most desktop virtualization products are "Type 2" and thus run on top of an operating system, McCall says. Type 2 hypervisors are sometimes vulnerable to various security, management and performance problems, according to McCall.

When asked if Citrix and Virtual Computer might forge a go-to-market partnership, Cohen said the relationship is still in its "early stages." Citrix made the investment in Virtual Computer this month after being impressed by the company at last September's VMworld conference.