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Microsoft Buys ‘Virtual Machine’ Assets

February 20, 2003

SEATTLE (AP) _ Microsoft Corp. said Wednesday it has bought software and patents for so-called ``virtual machine″ technology from privately held Connectix Corp., of San Mateo, Calif., for an undisclosed sum.

The deal, which closed earlier this week, covers technology developed by Connectix that allows computers running one operating system to run other operating systems and their associated programs _ all on the same machine. For example, one version of Connectix’s software allows Macintosh computer users to run applications built for Windows operating systems.

About 30 of Connectix’s 100 employees will also join Microsoft, said Kurt Schmucker, Connectix vice president for Macintosh products.

Microsoft acquired three versions of Connectix’s software _ one for Macintosh, one for Windows and a test version for computer servers.

The test version for computer servers was especially attractive to Microsoft, said Jim Hebert, general manager of Windows Server Product Management Group.

Microsoft is slated to release a new version of its operating system software for servers in April. But many corporate customers have told Microsoft they are concerned about upgrading, citing costs of new hardware as well as the prospect of losing some of the applications that were developed on the older server operating system, called NT 4.0.

To encourage corporate customers to buy the new version _ without losing those applications that run on NT 4.0 _ Microsoft decided it needed to offer some kind of product such as Connectix’s, Hebert said. Microsoft plans to release Connectix’s test version for servers by the end of the year, Hebert said.

The technology works for Linux-based operating systems, all versions of Windows and other operating systems that run on hardware powered by Intel-processing chips.

Competitor VMware, based in Palo Alto, Calif., said it, too, had been in talks with Microsoft over a possible deal, but declined to give details due to a nondisclosure agreement, said Diane Greene, VMware’s chief executive officer.

The 300-employee company, which has about 5,000 customers, is concerned about Microsoft’s entry into its market, she said.

___

On the Net:

http://www.microsoft.com

http://www.connectix.com

http://www.vmware.com

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