July 13, 2011 4:06 am

Citrix Systems in deal to buy Cloud.com

Citrix Systems, the networking and remote access technology company, on Tuesday announced a deal to buy Cloud.com, a three-year-old cloud computing start-up, in a deal worth between $200m and $250m.

It is the latest deal indicating the elevated prices that businesses are willing to pay for companies in high-growth areas such as cloud computing and social networking.

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Cupertino-based Cloud.com, had about 70 employees and had raised just $17.6m in two funding rounds with venture capitalists Index Ventures, Redpoint Ventures and Nexus Venture Partners. It had yet to make a profit.

However, the company supplies technology to big customers such as Apple, Zynga, the Facebook games maker, GoDaddy, the internet domain name company, and Korea Telecom. It allows individual companies to manage their own remote data centres better, and provides tools for companies, which want to set themselves up as cloud computing providers, in competition with companies such as Amazon and Microsoft.

Analysts expect the cloud computing market to be worth more than $11bn by the end of 2013, as more and more companies opt to have their computer networks hosted remotely by specialist companies.

Citrix already provides cloud computing services and technologies that allow workers to access corporate networks remotely, but is continuing to build up its capabilities. In 2007, the company bought Xensource, a data centre virtualisation company, for $500m.

Qatalyst Partners advised Citrix, while Goldman Sachs advised Cloud.com.

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