Microsoft Corp. has announced its intended acquisition of Israeli start-up company Kidaro, a provider of desktop virtualization solutions for enterprises. The announcement does not mention the acquisition price, but sources in Israel's high-tech industry estimate it at between $90 million and $100 million. "Globes" reported the impending acquiistion announcement yesterday.
Kidaro was founded in 2004. So far, $14 million has been invested in the company by Genesis Partners and US venture capital funds Opus Capital and Storm Ventures. Kidaro's founders are Ran Kohavi, who serves as a vice president of the company and was previously director of product management at Kashya, which was sold to EMC, Itzik Levy, vice president for R&D, who formerly managed large IT projects in government institutions, and Ran Oelgiesser, VP of product marketing and formerly a senior manager at Cyota, which was sold to RSA.
Microsoft's announcement said, "In combining Kidaro’s virtualization technology with its suite of desktop management tools, known as the Microsoft Desktop Optimization Pack for Software Assurance, Microsoft will enable IT professionals to optimize their desktop infrastructure by providing management capabilities for Virtual PCs, streamlining deployments and easing application compatibility issues."
The investors in Kidaro will record a five-fold return on their investment. Genesis Partners was the first to spot the potential in the company, and it was joined by Storm Ventures, a fairly young venture capital firm from Silicon Valley. About six months ago, Kidaro raised further funds from Opus Capital.
Opus Capital general partner Dan Avida, originally Israeli sits on Kidaro's borad. He helped to recruit Kevin Brown as CEO of the company. Brown served as a vice president on the original executive team of Decru, and was one of the founders of Inktomi. Avida founded Decru, which was sold to Applied Materials in 2005,
"Virtualization technology has tremendous potential to help companies reduce costs and increase control over their desktops, while simultaneously delivering benefits to end users,” Brown said. “By adding Kidaro’s technology to Microsoft Desktop Optimization Pack, Microsoft can deliver sophisticated virtual desktop capabilities and management to a wide variety of enterprise customers.”
Kidaro was apparently progressing well, and its investors were not intending to sell it, but Microsoft's offer, which "came out of the blue" according to a source close to the company, was one they couldn't refuse.
General manager of Windows product management at Microsoft Shanen Boettcher said, “The acquisition of Kidaro is an important component of our virtualization strategy, and it delivers a powerful new tool to help enterprise customers optimize their desktops. Virtual PCs can help businesses address a number of challenges around application compatibility, mobility and business continuity.
"Kidaro’s seamless user interface and management capabilities allow enterprises to more easily use and manage Virtual PCs. Incorporating Kidaro’s innovative solutions into the Microsoft Desktop Optimization Pack further enables virtualization across the enterprise, and is another example of how we are helping customers keep up with the changing needs of their business.”
The acquisition is further proof of Israel's high tech industry's ability to produce innovative software companies that do not burn a great deal of capital and make successful exits.
Two weeks ago, Microsoft bought Israeli ad targeting technology company YaData for a reported $20-30 million.
Published by Globes [online], Israel business news - www.globes.co.il - on March 13, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008