The thing about Xabi Alonso is that he has done great at Leverkusen, which is why everyone highly regards him and he deserves all of that right now. But being the manager of a huge club is not easy, being expected to win nothing and do more than you should is a great feeling and makes you regarded highly, however being expected to win anyway, means that if you win then that was already expected, and if you lose that would be terrible.
Do imagine him getting the spot after Ancelotti, he would be managing Real Madrid, if he wins the league, that was already expected, Real is a team that should win the league anyway, and if he loses, second place is not uncommon, Barcelona does win time to time, but he would not be loved all that much, and at UCL he should try to win too, and if he loses anything but semi finals, then that would be terrible too. Expecting someone to do better than expected is easy when at Leverkusen, not so easy when the expectation is the title.
There were rumors about Xabi and Real Madrid being close, but now Real Madrid have extended their contract with Ancelotti and this is good news for Leverkusen as they have lost a rival to take Xabi away from them. Leverkusen will certainly keep Xabi, because he has given Leverkusen something extraordinary and to get a coach like him will be very difficult. At least they can breathe a sigh of relief with this news coming from Real Madrid and Ancelotti.
Of course, many people will feel relieved by this news, even Bayer Leverkusen also feel the same way because Xabi is no longer a target for Madrid. Ancloti is a coach who is very suitable for Real Madrid and Ancloti has also been an important part since he coached a big team like Real Madrid. He is able to works together well so it is only natural that Real Madrid extends his contract because Real Madrid wants to achieve brilliant achievement with Ancloti.
Meanwhile, Bayer Leverkusen certainly doesn't want to part with Xabi because they have been very comfortable with Xabi coaching so far, if it weren't for the strategy thats Xabi maybe Bayer Leverkusen wouldn't be as consistent as it is now.