Is it time for Citrix to create a service provider licensing program?

Everyone is familiar with the traditional way that software is licensed. A customer buys a license and is then allowed to use the software.

Everyone is familiar with the traditional way that software is licensed. A customer buys a license and is then allowed to use the software. This works fine for using software internally within the walls of an organization. But what if the company buying the license is in the business of providing software as a service to other companies?

This is where things can get tricky.

One of the biggest problems that solution providers face is the fact that they have to buy licenses up front (which are very expensive). Combine those costs with hardware, infrastructure, billing, overhead, etc., and it’s easy to envision a scenario where it takes the service provider six months or more just to break even after they acquire a new customer. (And what if the customer leaves after that? Too bad! They're stuck with all those licenses you just bought!)

Of course in the real world, software vendors understand that companies who provide software as a service need special license programs. Microsoft has a program that’s called the “Service Provider Licensing Program” (SPLA) that’s available for many of their products.

So for example, if a company wants to provide hosted Exchange email services, they might be able to set up an unlimited number of mailboxes each month and then pay Microsoft a small amount for the actual number of mailboxes used in a month, instead of having to buy a full Exchange CAL for each user the first month that customer joins. This SPLA program also applies to terminal services CALs, allowing companies that host HR or accounting software for customers to do so with terminal services technology.

Sounds good, right? The problem is that when it comes to hosting Windows applications for remote, non-employee users, it’s really hard to do it with pure terminal services. Of course this is where companies like Citrix come in. Unfortunately I just learned that Citrix does not offer any kind of service provider or “pay as you go” type of licensing agreement!

I learned this last week when I received an email from a guy who’s part of a consortium of managed service providers in the accounting industry. Their group is looking to take their services to the next level where they host everything, and clients just connect to their apps via a web page (and maybe even via a thin client). They’re all enrolled in Microsoft’s SPLA program, but since Citrix doesn’t have anything like this they can’t use Presentation Server since they upfront costs would break them and it would take 6-8 months just to recover those.

So they called me and basically asked, “How can we do this without using Citrix?”

My first answer was that of course there are a lot of really solid terminal services add-on products out there now--2X, Provision Networks, Ericom, etc., and all of these companies would be happy to discuss SPLA-type licensing.

But more to the point, why isn’t Citrix offering this? I know they used to via a program they called their “iBusiness” program. In fact, a quick Google search of “Citrix iBusiness” turns up an article from Citrix’s own knowledgebase explaining how this pay-as-you-go iLicensing program works for MetaFrame XP. But where did it go?

I made some calls to Citrix and got in touch with a couple of folks from their licensing group and asked them about this. They were helpful and interested in talking, but their basic answer was along the lines of “if there is enough demand, we’ll make a program like this.”

So, to summarize, I ask you, the community, what do you think? Should Citrix resurrect their pay-as-you-licensing program for service providers, or is this market better left to the smaller SBC companies?

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To be honest i am surprised Citrix doesnt have this already, never had the use for it but i am still surprised. I know alot of people in the hosting business smaller and larger and now that i think of it, they do actually own alot of licenses.

What is more important to me is the now growing market with more and more businesses wanting to deliver applications as services to customers. If Citrix would fire up their Marketing machine this could be a great time to actually get a piece of this developing market.(I am not talking large hosting facilities, but smaller companies wanting to provide one or two services to customers)

I think alot of small companies actually want to start this but dont know where to go to get started, a marketing message could set things in motion.

/LamerSmurf

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Intresting topic, since we also thought over it a few month ago.. What we've also learned is, that the costs are indeed too much, so we droped the hole thing, because we would have need the Presentation Server.

It's really a mess that Citrix didn't wake up. I mean, hey whats up Citrix? Since when do you guys don't take your share of the pie? Take a look around you and see the potential that lies ahead of this thing.

I'd really appreciate if Citrix yould come up with a pay-as-you-licensing program, since it would enable also small companies to offer SBC solutions to there customers.

Although i think that it will be really interesting to see (with Windows Server 2008) if it is really that much necessary to use the Presentation Server anymore...

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I can tell you from experience that Citrix won't allow companies to partner with them under the Partner Program if you are a software as a service provider.  I recently joined a company that does offer a hosted solution for companies that use apps that are served up on our Access Suite infrastructure.  When I came on board I couldn't get Citrix to partner with us so that I can do what I do best....design solutions for other customers that are not a part of that SAAS solution.  This has left me with no other alternative than to partner with other "Application Delivery" companies like you mentioned above. 

If Citrix would bring that "pay-as-you-go" licensing program back, it would make my life sooooooo much easier.

 Cheers

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Recently I checked the license program for an ASP.Citrix Clamed the need an Flex contract with affiliates for all there customers.

With the number of licenses needed to start with Flex they stopped developing this ASP model.

I had about 10 partners asking me about an Citrix SPLA program this year. (In a small country called the Netherlands)

 Ben 

 

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We use Citrix internally for our business, but we've found we have server capacity to spare so we are considering running a small ASP as an extra revenue stream.  We've looked into SPLA as part of the solution, and if Citrix were to offer something similar, it'd be a no-brainer for us!  I imagine there's a few people here in the same situation...

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As consultant, I know personally at least 8 companies in France interested in such a program! They are ASP or Saas Provider and for the moment, they buy a lot of licences at the beginning of the year and they sell them along the year... It is very complicated and not optimized financially...

Vincent 

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I would like to mention that Ericom does already provide SPLA-like licensing for PowerTerm WebConnect for ASPs. So you can start using this model today with PowerTerm WebConnect.

Dan

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Didn't Citrix try this years ago with a project called FLEX that failed miserably?
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Citrix had a "SaaS" like pricing model back in the ASP boomdays so they're not unfamilar with the concept.  However they may be gun shy as they may have been burnt a bit when the initial ASP market imploded.  The entire MSP space, which includes SaaS, is a potental goldmine.

Cheers,

 Eric

eric@boundlessgroup.com

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It used to be called iLicense.  They charged everyone who wanted to participate $50K upfront.  And when they decided to cancel it unexpectedly, they offered us to make one bulk purchase at a steep discount.  Talk about adding insult to injury.  I would never do it again with Citrix.  They are greedy and can't be trusted.
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I just recently did some SoftGrid consulting for a real ASP that survived the implosion and the lack of licensing flexibility has shut Citrix out of their implementation. They could use Citrix to optimize their environment and enhance their client experience but those licenses have a very direct impact to their bottom line and pricing. These guys have been very brave going without Citrix and Longhorn server might get them the added functionality they need for a low price. Maybe Citrix wants nothing to do with this market segment because it is too small in their eyes but I see ASPs coming back in style and Citrix can either make inroads today or come back into this space when the boat has already left the dock.

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i work for a major ASP catering to the long term care industry, We host everything for our clients and have as many thin clients out there as possible..there are only afew scenarios where we need a PC, other than laptops. Our server farm has grown to more than 600 servers recently. Since we are an all online type shop, and all our users need to be connected to citrix to work, we have to accomodate for a huge number of concurrent connections. If we loose a customer, that might easily mean anywhere from 300 - 400 licenses.. an SPLA type offering would be Extremely helpful for us. Also it would help our clients..

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Hi Brian.

Isn't this a question you could as Mark Templeton yourself on your next interview with him?

As you can see from all the answers here ( and as you already know) the pay-on-demand issue isn't really a question if Citrix will do but when (I hope)...

I hope that someone at Citrix will comment on this!

Tordster 

 

 

 

 

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It would be really great! We are very interested in a program like this
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Propalms TSE has been offering this licensing model for the last 2 years and have many ASPs currently taking advantage of this rental scheme.

Matt

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back in 1999 we where the 1st and only company in belgium that used the Citrix Ilicense program. I think they have stopped this program after the Internet hype exploded. I am a firm believer of the Softare as a Service model and reentered that area in 2002, so you could say i am a survivor. Citrix had even an intelligent ilences meter counting the licenses for you on a monthly basis which you need to report to Citrix, something Microsoft of any other SPLA provider should do by default. It is not the ASP that should build license tools but the SPLA provider to avoid legal problems on the way licenses are counted. So Citrix make us happy and reenter the arena again. This time the market is ready and build on solid ground !
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I too just recently got into the ASP game last year.  As a CCEA I wanted to use Citrix but when we priced it out, it priced us out.  We ended up going with ProPalms.  Not as happy with ProPalms as with Citrix and would switch if Citrix came up with a reasonable SPLA type program.
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I've just startet working as Citrix administrator at a local ASP provider last month and the first thing I've heared here was something "Citrix burns our prices"... We own 1200 concurrent licenses for MPS and it became a big problem to calculate the costs in a way that doesn't ruin us immediately. We could offer many, many more applications to our customers, if Citrix had a modern, effective licensing model! Currently a complete city with all it's offices leaves us with a lot of unused licenses - possibly we have to raise prices to all other customers because of that, but we currently try to recalculate nearly everything to avoid this.

Citrix, pleeeeeeeeease add a SPLA license model! We need it NOW!

Hopefully they read this ;o)

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Vmware just release their asp license program!
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Not just ASP's - As a mid-size law firm, we have a need for about 200 concurrent users, but when we engage a full disaster recovery scenario, we might have 1200 Citrix users.  It would be nice not to have to buy all those extra licenses based on a "just in case".

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do you have a website for your company?

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Years ago, my company engaged in a project with Citrix engineers to replace Citrix RMS as a means to monitor and monetize Citrix Subsciber activities.  The licensing model between Citrix Systems and their customers could have easily been built on that data - pay as you grow.  However, Citrix abruptly refocused the product teams and we never finished.  For any of which need this feature as part of your business please visit www.revxsystems.com.  This is a solution which can automate application provisioning and monetize MetaFrame subscriber events.

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 Citrix needs this right now. We could sell Citrix to many companies if they had an SPLA system.

I've contacted Citrix About this several times. Apparently in Vancouver, Canada there's a company called StarGate which is still using the old iLicense program. They told me that that pay Citrix monthly for licensing. When I contacted Citrix they denied any of their partners could pay monthly.

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I agree. as I live in Europe where a big company is about 100-500 Users :) this would be loveley...

 So Please think of the little man as well CITRIX.

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I agree and think this would benifit both Citrix and ASP companies.  I have run an ASP for over 5 years and in the early stages concern was there for what to do if a large growth hit all of a sudden and we needed the $$ for upfront licenses.  We have grown to a large capacity now and have the funds we keep in a reserve for the large accounts but what a pain this is.
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