An interesting rumor popped up in the past few days that Citrix is close to acquiring RingCube, maker of the vDesk VDI user personalization software. Doing so would bolster Citrix's capabilities around user personalization for XenDesktop and XenClient, as well as giving them a decent play in the user installed applications space.
I've always loved RingCube's core technology. In the past I've said that they deserve an "attaboy" for putting together some cool stuff, but that I was less confident in their ability to survive in the market. They have great technology, but I'm nervous that the overall desktop virtualization market is developing more slowly then they'd need to survive. I wonder what their cash burn-to-actual sales ratio is now. (RingCube isn't unique in this predicement. I'm also nervous about Virtual Computer, MokaFive, and Wanova.)
This rumor came in via a few channels, and yesterday I called several folks who've been solid sources in the past for M&A activity in this market. Multiple people I spoke to produced the name "RingCube" without prompting, so I'm going to say the likelihood of this is fairly high. I also noticed that RingCube's CEO Pete Foley just added a new LinkedIn connection to Caroline Ghesquiere, a strategic development analyst at Citrix. Her LinkedIn job description reads "Support all strategic and corporate development activities including mergers and acquisitions, strategic investments and technology license activities." I recommend that you follow her new connections on LinkedIn if you want to keep tabs on what Citrix is up to. :)
If you're not familiar with RingCube, they have a product called vDesk that essentially "spawns" what appears to be a fully isolated Type 2-like virtual machine that runs on top of an existing copy of Windows. But unlike VMware Workstation or Microsoft Virtual PC, RingCube vDesk leverages the existing files (EXEs, DLLs, etc.) of the base copy of Windows to spawn the "VM." So instead of needing a multi-gigabyte VHD or VMDK to boot the VM, the entire vDesk package can be as small as 30mb. (VDesk leverages the same savings when it comes to memory, able to leverage the existing host OS files that are already loaded into memory instead of requiring a full GB or two to boot the VM.)
While the obvious advantage of vDesk is that you can boot an isolated VM based on just a few tens of MB of disk space and a few hundred MBs of memory, the disadvantage is that the version/patch/build level of the VM can only be the same as the host. Also, obivously, it only works with Windows hosts.
RingCube initially launched vDesk a few years ago as a solution for "local" or "offline" VDI, with the idea being that you could deliver a fully bootable VM in just 30MB. (Again, assuming that it was ok that the VM OS version and patch level would match whatever Windows desktop it was booting from.) But when they announced Version 4 a few months ago, RingCube changed their strategy, instead selling their product as the ultimate user personlization environment. (Imagine the isolation of side-by-side VMs without the overhead.)
RingCube's cofounder & CTO Kiran Kamity explained vDesk 4.0 at Citrix Synergy earlier this year in this 4-minute video interview.
What would Citrix do with RingCube?
Maybe the rumor of Citrix buying RingCube is just that: a rumor. But let's imagine that it's true. What would Citrix do with RingCube?
Obviously their first choice is to add vDesk to XenDesktop to enable a more full user personalization capability. This is something that Citrix is absolutely missing today. The closest thing they have is "Citrix Profile Management," (formerly called "User Profile Manager"), a capability Citrix got when they bought the Sepago Profiles product back in 2008. While it's a fine product for user profile management, it's *just* that--a fine product for user profile management. But in order to really enable users to customize and do whatever they want, you need a product that isolates and/or virtualizes the entire user environment, not just the Windows user profile. (After fifteen years, we all know that roaming profiles don't capture everything.) So buying RingCube could immediately give Citrix a "more than Profiles" capability. (Maybe RingCube + Shared Master Disk Image will avoid the TS versus VDI paradox?)
This is also great since a lot of Citrix's core XenDesktop capabilities are built around the concept of shared master disk images. (For example, XenServer's new IntelliCache functionality only works with shared desktops, as does XenClient's "Cached Image Mode.")
Second, we now know for sure that VMware View 5 will include a new profile management capability (which VMware got when they bought RTO Software last year). It looks like the capabilities of View 5's profile management will be very similar to Citrix's current Profile Management offering, so buying RingCube will enable Citrix to claim that they have better and more complete user personalization than VMware.
And of course, now that AppSense is in the spotlight after having received $70mm in funding from Goldman Sachs, Citrix buying RingCube can help them feel less bad about not buying AppSense when they had a chance a few years ago.
I would imagine that Citrix can pick up RingCube fairly cheap. So as with previous lower-cost desktop acquisitions like Aurema and Kaviza, what has Citrix got to lose?
Longer term we have to keep in mind that RingCube can only help Citrix with Microsoft Windows ("Big D") Desktop-based user personalization. And while that's inline with everything that Citrix is doing now, it will have to change at some point. So can Citrix extract enough value out of RingCube in the meantime? I guess it depends on what they pay for them.
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