XenSource gets new CEO, direction

Peter Levine has replaced co-founder Nick Gault as CEO, the Palo Alto, Calif.-based start-up plans to announce Wednesday. Levine most recently spent three years as a managing director at the Mayfield Fund venture capital firm. Before that, he led marketing, product development and business development at storage-software maker Veritas for 11 years.

Although Xen's influence has been spreading, making a business out of the software is a different challenge. Although IBM, Hewlett-Packard and other industry allies are helping XenSource to improve the Xen foundation, they become potential competitors when it comes to selling management tools such as XenSource's XenOptimizer. The Xen foundation this year is becoming a standard part of Linux versions from the two leading sellers of the open-source operating system, Red Hat and Novell.

XenSource's updated strategy is geared to ensure these potential rivals remain allies. Levine said the company's goal is to have its software incorporated into products sold by other technology companies--deals called original equipment manufacturer (OEM) partnerships.

"We believe that there's a great deal of fantastic innovation that will occur above the embedded layer and below the system management layer," Levine said in an interview. "There's a lot of really interesting enterprise-class operating system work we believe will be appealing to OEM customers even though they may be the shipping open-source bits as a foundation layer."

And the company said its updated approach will be more judicious. "The company tried to do too much too quickly," Levine said. "What I think it needs to do is focus around key assets it has."

There are other executive changes at the company as well. Simon Crosby, a co-founder who was vice president of corporate development, now is chief technology officer, replacing co-founder Moshe Bar, who left in October. And two weeks ago, the company hired a vice president of marketing, John Bara, formerly senior vice president of marketing at content-management software maker Interwoven.

Gault's departure was the result of XenSource's growth plan, Bara said. "This is a change warranted to scale the company," he said.

More executive appointments are expected to be announced next week, he added. And Ian Pratt, technical leader of the project and another XenSource co-founder, remains on board.

The open-source Xen project lets multiple copies of Linux run on the same computer through a technology called virtualization; the technology is of high interest as a way to replace several largely idle servers with a single more efficiently used machine. Xen is a "hypervisor"--software that manages a computer's hardware resources so they can be shared by multiple operating systems.

Hardware and software improvements under way mean Xen also will be able to work with Microsoft Windows and Sun Microsystems' Solaris operating systems and to run not just on x86-based computers but also those using IBM Power, Intel Itanium and Sun Sparc.

XenSource released version 3 in December, a few months later than expected, but there's still work to be done in maturing the software enough for widespread use. In particular, integration with mainstream Linux still hasn't occurred. Andrew Morton, a top Linux programmer, said in a January e-mail to CNET News.com, "I'd expected Xen to be merged over six months ago, but it looks like their priorities were elsewhere."

Xen's current leading competitor is EMC's VMware subsidiary, which leads the market and just began offering its VMware Server product for free in an attempt to become more widely used. Other competitors include SWsoft's Virtuozzo, Microsoft's Virtual Server.

Xen raised $23 million in two funding rounds in 2005. Kleiner Perkins Caufield & Byers and Sevin Rosen Funds led the $6 million Series-A round in January, and Accel Partners contributed. Those three returned for the $17 million Series-B round in September, which also drew funding from New Enterprise Associates.

The company has about 50 employees, a company representative said, an increase from 45 last August.