Microsoft beating Citrix? (Looking back at 10 years of "Microsoft is going to kill Citrix" stories.)

If you've been around the server-based computing industry for any length of time you're no stranger to the Citrix rumor mill. At one time there were stories about Citrix being doomed as a company, acquired by Microsoft, acquired by Oracle and even IBM or Cisco acquiring them.

If you've been around the server-based computing industry for any length of time you're no stranger to the Citrix rumor mill.  At one time there were stories about Citrix being doomed as a company, acquired by Microsoft, acquired by Oracle and even IBM or Cisco acquiring them.  Of course none of these rumors came true, however the Microsoft killing Citrix rumor continues to have the most weight because they are the most likely company that actually could replace the functionality in XenApp into the native RDS functionality.  

Citrix's Demise in 1997?

One very interesting rumor (almost a fact) was that of Citrix's demise in 1997.  That year was when Citrix's license to the NT 3.51 source code was up and Citrix needed to obtain a license of the NT 4.0 source code or they were sunk as a company.  Microsoft was noticing Citrix's rise in profitability and began to wonder if they should take a bigger piece of the pie and not let this company keep reselling a modified Windows product quite successfully.  Citrix stock tanked and it certainly looked like they might be doomed.  After much negotiations, Microsoft later decided to strike a deal with Citrix.  They would pay Citrix $175 million to incorporate Citrix's MultiWin technology into a Microsoft Windows Terminal Server product.  Microsoft would supply it's own protocol RDP and Citrix would retain rights to ICA.  This was a defining moment in Citrix's future.  Had that deal not come along, Citrix would quite possibly not exist today.  An interesting bit of trivia on this topic is that there was a person who was critical in the negotiations of this deal at Microsoft.  That man, Paul Maritz is now public enemy No. 1 at the helm of VMware.  However, if it weren't for him there might not be a Citrix to compete with today.  Interesting trivia, but getting off topic.

Microsoft to release "Citrix-killer" in 2003 R2

If you look at the history of RDS and Citrix products, there have been various "Citrix-killer" rumors over the years.  None of the rumors were more crushing and realistic than the Project Bear Paw announcements in 2003.  Microsoft had already successfully launched Server 2003 and were in the planning / execution phases for 2003 R2 and they made it known that they were planning on making some substantial improvements in Terminal Services.  Back in the Server 2003 timeframe there was very little that could be done with native Terminal Services as it lacked application publishing, seamless windows, good web interface, load balancing, enterprise management, etc.  In June of 2003 a Program Manager for Terminal Services named Adam Henderson presented a deck at TechEd called "Terminal Services in Windows Server 2003 Technical Overview".  The presentation was largely a rehash of existing known info, but it did contain a roadmap slide indicating what Microsoft was planning to do with Terminal Services.  The short list of items includes:

  • Application Publishing
  • Remote Apps Integrated Locally (RAIL) - Basically start menu integration
  • Collaboration
  • Single sign-on
  • Multimedia redirection
  • etc

Brian has blogged about the announcements related to Bear Paw and further analysis of what it means to Citrix.  There is also a document containing info from a Citrix FAQ regarding their responses to the Bear Paw announcement.

Bear Paw never happened. So what's your point?

Bear Paw never was released, though Microsoft did incrementally improve TS/RDS over the years.  Let's look at Server OS releases since then and talk through their major enhancements:

Server 2003 R2

This server OS release focused on core infrastructure improvements to AD, branch office server deployment, etc.  Unfortunately, nothing really improved in 2003 R2 related to Terminal Services which is why I advised many customers to just keep deploying Server 2003 unless your organization standardized on 2003 R2 Server images.  Pure RDS/TS folks were just able to skip this release.

Server 2008

This was a big release for Microsoft.  There were lots of core OS changes that ultimately improved the situation for RDS like:

  • Hard resource quotas for shared critical resources - To protect things like paged pool memory allocations
  • Page file optimizations - Reading and writing the page file in larger blocks of memory
  • Low priority I/O - Allows for things like disk defragmentation and anti-virus scans to run only when low disk I/Os are occuring
  • SMB 2.0 - Can improve read/write speeds to file servers where user documents and profile data are stored
  • Kernel Transaction Manager - Provides better reliability of application of server hot fixes, etc.
  • Windows System Resource Manager - Provides mechanism to control resource consumption of user processes (works with RDS sessions)
  • Group Policy Preferences - Removes the need for most logon scripts.

Specifically for Terminal Server functionality, the following features were added:

  • TS Remote App - Seamless windows and locally integrated apps in the start menu.
  • TS Web Access - Web user interface to TS Remote App Published applications.
  • TS Session Broker - Limited, but functional brokering of user sessions.
  • TS Gateway - RDP over SSL tunneling/proxying of RDP sessions.  Single point of access through public firewall.
  • TS Easy Print - A least common denominator fall back software printer similar to Citrix's Universal Print Driver v1 / v2
  • Higher screen resolution - Up to 4096x2048.
  • Parallel session creation - Prior to Server 2008, only a single TS session could be logged on simultaneously.  Session Manager improvements now brings a minimum of 4 simultaneous sessions.
  • Dynamic System Address Space - Dynamic balancing between Paged Pool, Nonpaged Pool and System PTEs.  In 2003 these boundaries were determined at boot time and were static.
  • Built-in User Profile Hive Cleanup Services - No more need for UPHClean (at least for stuck registry handles)

While these are some great features for Server 2008 Terminal Services, the reality is that they were quite limited.  Limited enough to prevent most people from deploying this without Citrix as some add-on middleware.  Brian blogged about this release and his assessment was "Citrix has nothing to worry about" and it was largely true.  However, this release pretty much adds the rumored features of Bear Paw.  There were plenty of companies wondering if this release had just enough that would allow them to shake the extra Citrix licensing.  In most cases, it didn't deliver enough.

Server 2008 R2

Yet another huge release for Microsoft and lots of changes for TS (now called Remote Desktop Services).  Let's look at some core additions:

  • Hyper-V 2.0 aka R2 baked in - Hyper-V 1.0 was much too poor performing for most to consider it.  Hyper-V R2 is right up there with vSphere and XenServer
  • Direct Access / Branch Cache - Great new technologies for enabling branch office users and mobile laptop users to provide access to files, etc in an WAN friendly way.
  • IIS 7.0 - Yet a more secure IIS web server version

Specifically for TS/RDS, the following features were added:

  • Broker now integrates VDI (RDVH - Remote Desktop Virtualization Host) and TS (RDSH - Remote Desktop Services Session Host)
  • Improvements to RDS Web Access and RD Gateway
  • True Multi-monitor support (prior to this Microsoft only supported spanning - now you can have up to 16 independent monitors in any shape and resolution)
  • Improved multimedia support and bidirectional audio support (for VoIP applications)
  • Aero Glass supported over RDS
  • Windows Installer Engine properly supports multiple simultaneous logons and processing of self healing by queuing actions (this use to fail completely)
  • RDS Powershell Provider - For automating RDS via PowerShell

Server 2008 R2 with SP1

Server 2008 R2 Service Pack 1 added two primary features:

  • Dynamic Memory - A method of dynamically allocating memory to VMs to provide higher density while allowing good performance.
  • RemoteFX - New method of providing virtual GPU access to VMs on Hyper-V.  Provides a content agnostic host-side rendered RDS model.  RemoteFX is the future direction for RDS, however it's currently a LAN-only technology.

In looking at all of these incremental improvements to RDS, it's clear that Microsoft continues to improve the platform.  So what is it about Citrix XenApp that continues to lead the pack against Microsoft and RDS?

Star Wars aka "Where Microsoft Loses"

Brian blogged back in 2005 an article named "Do you need Citrix or is Terminal Server enough?"  It's a good read and I suggest you take some time looking it over.  What's interesting is that Brian highlights two misconceptions in the beginning of the article.  In summary, they are:

Misconception #1:  ICA is better than RDP.

Brian states that this is false and that RDP has made significant strides with the protocol, etc.  While I would agree with Brian that RDP has come along way, it's all about the WAN man!  The WAN is one area where Microsoft loses big time and anyone who's run RDP over 200+ ms will tell you that.  The blocky tiles painting one by one will only reach about 15 tiles before you're ready to murder someone.  Working on a RDS session like this for any length of time is not likely to be well received as a practical solution.  So I'll disagree with Brian here and say that ICA is king on the WAN.  If Microsoft wanted to pose a serious threat to Citrix, they'd have to make RDP almost as good if not as good as ICA to compete here.

Misconception #2: f you have 50 (or 75, or 100, or whatever) number of users or less, you can use pure Terminal Server. With more users you need Citrix.

Brian states that this is false and that the number of users you have or the number of RDS servers has nothing to do with whether you use RDS or Citrix.  This too is an area where I'll disagree with Brian.  RDS has RemoteApp and it does work.  Try maintaining that at scale with hundreds of published resources across many silos of servers and unless you develop some of your own tooling, it's painful.

In my years of consulting I'm often asked "Can we get rid of our Citrix licensing yet and just use pure Microsoft?"  After I go through the many different aspects of what Citrix does for the customer it ultimately comes back to these two items for most people.  Sure Citrix has smooth roaming, workspace control, smart access, etc.  But to be honest, what brings most customers back to Citrix every time is the above two items.  These are the lynchpins of Citrix being entrenched into customers.

The Empire Strikes Back

At Microsoft's BUILD conference a few weeks ago, Microsoft provided a sneak peek at what might be coming in the next release of Windows for the desktop systems as well as Server OS release.  Currently known only as Windows 8, Microsoft seeded developer builds for the desktop OS and Server OS.  While there were some interesting things disclosed about Windows 8 Desktop OS, it's all largely a "Meh!" to me as it seems to be little different than Windows 7 for the Corporate user.  I do think that Windows 8 will have a big impact on the tablet market with it's Metro user interface.  However, that's largely off topic so I want to focus on the Server OS preview and talk specifically about what it means for RDS.

Microsoft shared a video of a presentation at BUILD regarding RDS enhancements in Windows Server 8.  In this presentation Nadim Abdo and Gaurav Daga lead an hour long presentation that provided some details about what Microsoft is doing with RDS in Server 8.  And for me, this is the Bear Paw Citrix should be worried about. I highly recommend you watch the entire presentation as there is some good visuals that you'll want to see rather than just reading about.  If you're short on time, here is a quick breakdown of the items that are covered and my thoughts on them:

  • New Metro Style RemoteFX Client - Of course this has to exist.  Microsoft is investing heavily into the Metro UI in Windows 8, so they are introducing a Metro-style RDS client.  This will likely only apply to Windows 8 clients, but it does look pretty cool.  Aside from that, it's Meh!  One nice feature of the Metro style client is snapshot previews of your existing RDS sessions.  That's a pretty cool feature.
  • RemoteFX for WAN - RemoteFX is quite impressive on the LAN, but up until now was limited to that scenario.  Microsoft is making improvements to RemoteFX that will allow it to function well on WAN networks.  Recall from the previous section that this is one of the key reasons why Microsoft loses today.  RDP and any other TCP-based protocol tends to have problems when you run those protocols over a network that has packet loss or high latency.  The issue is due to the fact that TCP is a connection oriented protocol and as such attempts to maintain packet order and retransmits lost packets.  UDP does not have this problem as it's a connection-less protocol that effectively broadcasts content.  Microsoft is adding UDP transport support to RemoteFX to accommodate better performance for RDP over wide area networks.  They are still providing intelligent fallback to TCP capability in the event the host/client can't establish UDP communication (think firewalls!).  In addition to the transport changes, Microsoft is introducing something called Adaptive Graphics that will help reduce required bandwidth for rich content over WAN networks.  Microsoft has improved RD Gateway to add support for RDP, so connections via UDP-base RDP are secured through RD Gateway just as they are with TCP-based RDP.
  • RemoteFX Adaptive Graphics - Microsoft is breaking up content into different types and rendering them differently.  This was always the case with traditional RDP whereby some content could be GDI primitive remoted while others were bitmap remoted and audio/video content was redirected.  Historically under RemoteFX you only had host side rendering for all content with just audio/video content being redirected.  It appears Microsoft is improving this so different types of content are rendered differently.  For example, text might be rendered with one codec and delivered quickly with extremely low bandwidth.  Meanwhile, image content is delivered using a progressive rendering technique that I'll assume is quite similar to that of Citrix's Progressive Display.  Lastly any animated content or fast moving images will be rendered using a video codec (I believe Microsoft said H.264) and sent that way.  Between the RemoteFX for the WAN and this Adaptive Graphics, these two features sound like they will finally level the playing field in the RDS/RemoteFX vs HDX game.
  • RemoteFX Media Remoting - Microsoft has developed some new H.264 codecs that they are using to process video and compress it about 10:1 vs what was possible on 2008 R2 / Windows 7 via RemoteFX.  Really excited to get a chance to place these new video codecs in the multimedia tests that Benny Tritsch and myself perform.  As far as I know these video codecs are not specifically limited to Windows Media types as it was demonstrated using Flash.  Can't wait to dig into this more.
  • RemoteFX Multi Touch - Microsoft will offer 10-finger multitouch remoting for applications running over RDS.  While this is quite limited today, it's clear that much of the PC/device industry is moving towards touch.  I was quite impressed to find that Microsoft is supporting full multi-touch and not a limited one or two finger touch solution.  It remains to be seen if this technology will work well over the WAN, but it is quite impressive.  It's also important to note that this technology will not be limited to the Metro-style RemoteFX client, but will be available in the regular client as well.
  • RemoteFX USB Redirection - While Citrix and others have long supported USB device redirection in their VDI solutions.  USB device redirection and isolation was always something that has plagued multi-user Terminal Server or RDSH systems.  Due to the inability to redirection and isolate USB devices, some applications have needed to go the route of VDI because there was no way to redirect the device within Terminal Services.  Now before anyone says "We've been redirecting USB Printers, Thumbdrives and Scanners for years", that's absolutely true but those devices were not being redirected at the USB Bus level, they were redirected via device dependent redirection virtual channels for printing, drive mapping and TWAIN.  What Microsoft has done with Windows 8 is not only provide redirected, isolated USB device support within their VDI product RDVH, but also within RDSH (Traditional Terminal Server).  This is incredible news and as far as I'm concerned opens up so many more applications that are now possible in Terminal Services.  Being that this is a platform play, it will of course be beneficial for Microsoft ISVs such as Citrix and Quest, etc.  Very exciting news.
  • Software or Physical GPU -  One of the biggest limitations with Windows 7 SP1 + Hyper-V is that is required a physical GPU in the server to support any 3D graphics (unless you were planning on using 2008 R2 RDSH which didn't use a physical GPU).  Microsoft has added some capabilities to Windows 8 Server for VDI scenarios to now support RemoteFX capabilities either with or without a physical GPU.  If the physical GPU is available, RemoteFX can use it.  If you don't have a physical GPU, there will be a soft GPU where the GPU instructions are emulated in CPU.  So now RemoteFX will be support in VDI scenarios without or without a GPU and on physical machines.  One has to wonder if this was always in the plans or if this is something Microsoft did in reaction to VMware shipping soft GPU support in View 5.  All I know is things are getting very exciting between VMware and Microsoft having soft GPU support, Citrix having DX primitive remoting for Aero as well as GPU-based HDX3DPro (including GPU passthrough) for high end graphics.  Very exciting times for rich graphics in remoting scenarios.
  • Published apps and desktops via email - Microsoft seems to have improved the RemoteApps publishing and Web Access scenario by making it more like the Outlook Anywhere / Exchange Autodiscover process.  When you setup a modern Outlook client for corporate use all you need to do is specify your Corporate email ID and password and Outlook will behind the scenes query and if Autodiscover is setup, Outlook can configure itself for RPC over HTTPS and connect you to your mailbox.  It seems that the Metro-style RDS client and Server 8 is supporting similar functionality where a user can just enter their email address and password and automatically get a list of the published apps and desktops that are assigned to them.  This is true even with a non-corporate asset.  I really want to dig into this feature more and figure out how it's working.  I'll plan on putting up an article on that later.
  • Bandwidth and Round Trip Latency Info - Microsoft has demo'd the Metro Style RDS client having a Connection Info window where the end user can see their estimated network bandwidth and round trip latency.  I'm hoping Microsoft provides this via server side PerfMon counters since latency was never something that one could easily record for performance metrics and such.  Citrix had this for years now.

I'm hoping to get more time to work with Server 8 / Windows 8 hands on so I can provide further details on the specifics of the above items.

Will there be a Return of the Jedi?

What will Citrix do in response to these improvements?  Well, first of all we should assume they already know about these enhancements as they work very closely with Microsoft.  My general gut feeling is that Microsoft will continue to improve RemoteFX, but there will still be use cases where HDX outperforms it in certain WAN conditions, etc.  Also, Microsoft is very focused on the latest greatest client side OS (because that's how they earn revenue).   So there's a huge opportunity there for Citrix to provide a Windows 8 experience on down level operating systems and alternative operating systems.  How well this will work or not depends largely on how good Microsoft's RemoteFX thin clients are.  If they are good enough, no one in their right mind is going to consider repurposing a PC or buying new thin clients that are non-RemoteFX if they can acquire a bad ass RemoteFX thin client for $100.  Given that we make the assumption that Citrix will find ways to stay ahead in the protocol space, but we assume that Microsoft will continually play catch up, there's only one area that I discussed where Citrix maintains the lead and that is in enterprise management.  Citrix does a much better job of this right now than Microsoft does.  I'm pretty confident at this time that Microsoft won't nail this as Citrix has largely because Microsoft has a tendency to try and glue everything to SCCM and SCVMM.  If they do that, they'll fail miserably.  If they find someway to improve management of large environments and it's inbox, then lookout Citrix.

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Very good summary, Shawn.

Here are the 'features' that Microsoft is currently lacking:

1. Provisioning Services (this is a big one. VMM 2012 doesn't come close because it can't provide a read-only C: drive)

2. Private vDisk (Ringcube)

3. Citrix User Profile Manager

4. XenClient (I know Windows 8 client has Hyper-V 3.0 in the client SKU, but it's not a product but rather 100% platform play I think)



Great blog Shawn,

I think you wrote everything about the technical side of Citrix / Microsoft partnership battlefield, but on the other hand there is a big economical / strategical story from the past and which will continue in the next years.

Microsoft is not the "biggest" company in the IT world anymore and I think it might change their strategy regarding partner like Citrix.

Cheers, see you soon !



Nice article Shawn.

Provided Microsoft can get the management and provisioning right (through SCCM/SCCVMM for better or worse I guess) and actually come through with the promised feature enhancements and additions, then the situations where Citrix are the only answer will dwindle that bit further.

I also agree that a $100 RFX endpoint with a bundled VECD licence will be a killer product - one of the first arguments encountered when broaching the topic of VDI  (or RDS for that matter) is that refreshing the endpoints with more easily managed thin/zero client kit is often as expensive as just refreshing the whole fat client fleet, never mind all the licencing and backend hardware.

As a VDI solution, VMware have a rapidly improving product in View, but they're support for RDS type deployments are rudimentary compared to Xenapp etc.

Microsoft could be well positioned to combine several key components to build a very compelling platform - high performance remoting protocol, unified RDS/VDI deployment and management, low cost endpoints and the simplicity and convenience of getting all from one place.

Also, with the rise of the tablet, cloud etc etc, Microsoft can no longer sit on the sidelines and hope that thier historical server + desktop product model will keep them on top. Suddenly the product space that Citrix lives in (streamed applications, remote compute) is a lot more important and Microsoft won't hesitate to bury Citrix if they believe thier own continued success depends on being dominant and unilateral in that space.


Microsoft would be hurting if Citrix would have collapsed and disappeared. Citrix is Microsoft's most important partner. Microsoft is Citrix' most important strategic partner.I think that partnership will continue to grow stronger, as Citrix is more nimble than if Microsoft buys them - and besides, wouldn't there be a swarm of "anti-trust" talk if Microsoft bought Citrix?

Microsoft needs Citrix and Citrix needs Microsoft. Now how about V-Alliance and Citrix' strong push for Hyper-V? Is there something we should know about the future of XenServer?


Fantastic article Shawn, really enjoyed the read.

From my point of view, Microsoft's improvements and product offerings to date have been close to copies or a different spin on current Citrix product offerings.

As the topic of this post has been Microsoft and Citrix (but mostly swings around SBC, e.g. RDS VS XenApp) I feel to truly evaluate the "Citrix Killer" debate you need to also consider the added features and benefits of the Flexcast model to the Citrix portfolio over the rather disapointing features of MDOP (with the exception of App-V). as an example, Med-V vs XenDesktop. even just from a VDI perspective these products aren't remotely comparable for richness of features in my opinion.

As you pointed out at Synergy, most customers can live with default offerings of user virtualisation. I agreed with this to a point, but in large scale projects the 3rd party dedicated offerings always add the necessary value to cover most use cases.

Similarly I feel that as Microsoft adds these continued improvements to their RDS suite, many customers will be able to utilize these technologies in niche deployments to satisfy that need. But a wide scale implementation will always require a dedicated product suite I.E, the flexcast offering from Citrix to satisfy the entire business need, not just the niche.

Thanks again for a stimulating article, It's given me a few things to think about :)


Thanks everyone for your comments and Bravo! on getting through this novel of an article.  I promise future ones won't be soooooo lengthy.  One quick thing I wanted to comment on is that my mention of the sub-$100 thin clients running RemoteFX have been well known for a while.  This article was written about a week and a half ago (prior to the public announcement of Citrix's System-On-a-Chip HDX sub-$100 thin client announcement at Synergy Barcelona).  Now that both vendors are seeking the sub-$100 thin client space I think things are going to get very interesting in the VDI world.


Stephane Thirion, I would have to agree with you that the Citrix / Microsoft partnership is a big strategic partnership – at least from Microsoft’s perspective. Just think, for every ZenApp implementation that Citrix makes, Microsoft is making money off of the RDS CAL required for deployment. Through Citrix, Microsoft has an unpaid sales force working on their behalf. Why would Microsoft hinder this relationship?

Though, the unfortunate part for Citrix is two-fold: 1. when Microsoft does gain ground in the management capabilities of RDS/RemoteApp/ VDI/App-V deployments, and any combination thereof, Citrix will be in trouble. The reason being is that, as Microsoft advances in these avenues and customers begin to look at alternatives from paying Citrix the costly $$’s per user, Microsoft will already have this existing RDS user base of Citrix customers that already have the TS/RDS CALs in place. A seamless transition it would be for users to transition to Microsoft. 2. ZenApp / Zendesktop is not a solution for SMBs. Don’t take my word for it. Rather, listen to it coming right from the General Manager of Citrix, Troy Trenchard with his blog regarding The Right Tool for the job (

Allan Harder, Microsoft needs Citrix only for as long as it will take them to catch up to them. If anything, as the economy becomes more pressured and budgets become further constrained, Microsoft will be further pressured to provide a solution from Microsoft without the continued reliance on third party products which bring increased cost and complexity for customers.

As Wonderdog put it, “Microsoft could be well positioned to combine several key components to build a very compelling platform – high performance remoting protocol, unified RDS/VDI deployment and management, low cost endpoints and the simplicity and convenience of getting all from one place”. The problem is, is that Microsoft hasn’t.

BottomLine: Coming from an SMB perspective, Yes, Microsoft is slowly closing the gap on their reliance on Citrix. And granted, Microsoft could do just fine without the Citrix or third party relationships if they had a more refined and simplified in-the-box solution offering starting for SMBs upward to meet the client needs – instead of pushing System Center products down the throats of SMBs. Think about it. How does Citrix make the bulk of their money? Thru ZenApp. Microsoft could do the same as long as they provided a complete in-the-box simplified solution instead of a complex set of independent free managers one has to mix and match, then manage the nightmare.


Great article!

Some questions:

Does MS have anything close to IMA?

Isn't remote FX a Windows client only solution?

Where does this leave the Mac users, the Linux users, the Mac iPad users, the iPhone, tablet and other hand held device users, etc...

Have you seen the Citrix policies with all the granularity of controlling each individual channel within the ICA/HDX protocol for each connection?

There are a lot of features in these policy options.

Are companies so deeply entrenched and loyal to Citrix that it would take like 5 years to eliminate Citrix if they wanted to?

Yes - I do remember a company named Novell. :)

Citrix has a suite of products many companues are already using including XenApp, XenServer,

Provisioning Services, Access Gateway, NetScaler, Branch repeater, etc... and people are tryng to use

Why Citrix does not emphacize Provisioning service more is beyond me.

It will be interesting to see what will be included in the next releases from MS and Citrix. Until is all vaperware and as history has taught us it may still be vaperware when these new products are released.

Competition is a good thing.

Even though Citrix and MS are each other's best partners they are also each others main competitors. Therefore,  they also serve as each other's highest motivation for product development enhancements.

Please clarify my perceptions if they are not accurate.



Great to see you writing Shawn. I think there are additional factors to consider within MS. Bob M is gone, the new guy does not care about RDS. He cares about Azure and SCCM. RDS is just noise. More importantly the Windows client team does not care about VDI and they think RDS is a joke. That alone IMO will starve the RemoteFX team of the attention and innovation they need. There is a reason people like Nelly P, Tad B got out. Smart people don't leave jobs in numbers unless there is a deeper reason. Microsoft has the cloud, google apps/search, Apple, VMware, gaming to worry about. Citrix who? All noise and it doesn't matter, they only need incremental improvement to get customers to keep paying for renewals. The real strategy behind RemoteFX IMO is nothing to do with Citrix, it's everything to do with it supporting Hyper-V only to push the MS agenda against VMware in the data center.

You bring up a great point that Citrix wins because of Wan and Management. I believe they will keep doing stuff with HDX for a while to stay ahead, and as other's pointed out it's sticky so will be there for a while. I am highly skeptical of the whole System on a chip play outside of very specific use cases and don’t even get me started on the management. The whole nComputing thing was just a hand shake for the fired GM of XenDesktop (now nComputing CEO) who has no clue about the desktop. HDX or whatever will always be inferior to local, so having that flexibility for the exception use case will continue to be important. Reverse Seamless anybody (oh yeah Citrix has it for XenApp only, another XD F up). Next time Citrix says HDX, ask them which one, the useful one or the hype one.  

WRT management. Citrix for years has stayed ahead. However there is now a change. Internal management changes, who don't care about XenApp. Just listening to the earnings report. It's all about how they are slowing the XA business and it's all XD. Their level of thinking on VDI and management is a joke, which I assume is their escape from XenApp jail strategy which is not a bad thing to do and a way to move beyond the MS threat. However, Citrix knows nothing about desktop management and are struggling to get out of this. The Vdi cost model presented at Synergy was the icing on the cake, and just shows stubbornness from people who don't really understand the business they are in. Start your count down and quote in 6 months Citrix's own promise to make VDI cheaper than a PC. It's about the management stupid! RingCube and UPM together are not even close to making desktops cheaper and are not management solutions. Even AppDNA is just a toy for lazy application packagers who are not very smart. Citrix will only make VDI cheaper than a true PC environment that is true for a micro slice of use cases. Management is the path to cheaper desktop and Citrix just does not have the DNA putting forward ideas in that arena.

Since they understand that, in typically vendor fashion, they move into new spaces. ScareFile, sending all your corporate data outside is going to be a SaaS business not an enterprise solution. All this cloud stuff, GoToXXX are all areas they are growing to help take the fall for the XenDesktop screw up and failed replacement of XenApp. As I've said before, to win XenDesktop Citrix has to understand that they need to win on the management. However leave that up to stubborn thinking that has been in place for years and you will go nowhere. While they screw that up, MS catches up and opportunity with taking XenApp to the next level is wasted. I'm not surprised smart people have left Citrix recently. Who does Citrix have now that really understands the desktop? It's not their product management team that I am 100% sure of.


Hi Shawn,

Very nice and timely article. Here are my thoughts on this.

1. I think Citrix and MIcrosoft [BIG BROTHER] relationship was made in heaven AS LONG AS Microsoft was the dominant player in the IT and end user computing space.

In this scenario, Microsoft was happy with the indirect [influential] revenue that Citrix was bringing together. Microsoft needed Citrix and Citrix needed Microsoft.

2. However, Microsoft is no longer in the dominant position and they look so much vulnerable with attacks from VMware, Google and Apple.

This caused tensions in the Microsoft-Citrix relationship. Citrix suddenly does not have the comfort of the big brother. So they are trying to carve their own destiny with or without Microsoft. I think this caused big damage to this relationship.

If you looked at the Citrix Synergy presentation -- it opened with the Microsoft relationship disclaimer slide that this relationship is strong, but everything followed was all about "NON-Microsoft". Partnerships with Google, Apple, Cisco, RackSpace etc etc.

Microsoft on the other hand they dont want to rely on Citrix to wage the battle against VMware because of Citrix failed execution with XenServer, XenDesktop etc.

So Microsoft is taking charge on their own. This all came to fore during the acquisition of Calista [which is now RemoteFX].

Actually, I was witness to some open competitive fights between HDX and RemoteFX between the Citrix and Microsoft camps.

Overall, it is good for the industry.

I am a big believer in Microsoft story -- and now I feel that most of the pieces are coming together nicely with Office 365, Hyper-V/SCCM, significantly improved RDS with RemoteApps -- and finally RemoteFX with LAN/WAN -- with cutting edge H.264 support. I also like what they are doing with Windows8 both on the server and desktop side with Metro. Of course, I am much more bullish on Microsoft on Windows8 server than on the desktop -- but Microsoft has 500M userbase there.

Microsoft also has rich experience in the VoIP with their OCS/Live products -- and knows how to deliver rich interactive collaboration experience better than anyone.

Citrix has been scrambling to protect and make their own distinct identity with platform agnosticity with receiver, etc. However, I have to admit that I hate seeing the ads "XenDesktop: Best VDI for vSphere" -- at least they have to follow it up with something like "XenDesktop: Best VDI with XenServer/Hyper-V/"..

It will be interesting to see how Citrix will execute in this changed world where they now have to compete with Microsoft, VMware and others. I hate them to become a x-platform connection brokering company -- which is a small niche.

Of course, Citrix has a great team and assets.. This is the best opportunity time for everyone, mostly Citrix.




As one might expect from a very smart, detail-oriented technologist like Shawn, this article provides interesting technical analysis even as it arguably "misses the forest for the trees."  

In asking whether Microsoft is "closing in on Citrix" the analysis fails to account for the positive effects of Microsoft becoming more serious about the VDI/RDS space.  Let's say that the VDI/RDS market was $500m in 2001 and that (roughly speaking) Microsoft had 10% share and Citrix had 90%.  Does Citrix care that in 2011 its share has now dropped to 60%?  That depends.  If the overall market hadn't grown much, then 30% share loss would be a real problem.  If the market size is now $3B, however, then it doesn't really matter very much to Citrix.  Microsoft and VMware got more serious about the VDI/RDS space over the past 10 years and created competition for Citrix, but more importantly it validated and helped grow the overall market--and therefore increased the overall opportunity for Citrix in the process.  This article looks solely at the share decline from 90% to 60% without considering the overall growth of the market.  Last quarter, Citrix's desktop business grew 14%, which is considerably faster than it was growing 5 years ago.   (Source: )

In other words, it looks like competition (whether from Microsoft or VMware) is good for Citrix.

The other thing to consider from a overall Citrix standpoint is that it is a much more diversified company than it was 10 years ago.  The days of the one trick pony are long gone.  In aggregate, Mark Templeton is concerned about the growth of the overall Citrix business (essentially this is what appdetective calls "typical vendor fashion" as if staying in business and growing is somehow wrong-headed). The NetScaler+Cloud business is now nearly a half-billion dollar business annually.  So is the GoTo Online business.  Those two businesses combine for nearly $1B in revenue, and neither one has much to do with Microsoft, XenDesktop, or XenApp.  Even as the Desktop business at Citrix is growing faster today than it has in years, the percentage of the company revenues attributable to Desktop continues to decline and may go under 50% in the next year (compared to nearly 75% just a few years ago).  If you only read the headline of this article ("Microsoft closing in on Citrix") you'd completely miss these facts, and perhaps draw false conclusions--just as was done in 1997 and with "Bear Paw."


Wow it seems I've peed in someone's lemonade here with this article.  I just want to be clear to everyone that I don't anticipate that Microsoft is going to swallow Citrix's marketshare.  I also believe that Desktop Virt (much like cloud) is a vast market that is largely untapped.  The only point of this article was to highlight that Citrix is losing it's competitive edge against Microsoft if in fact Microsoft delivers everything they are on target for with Windows Server 8.  Does that mean Citrix has no momentum or no shot at the XenApp/XenDesktop market, of course not.  Much like my views on XenClient vs Windows 8 Hyper-V whereby I feel that XenClient is DoA for 90% of use cases when Hyper-V CHV ships in Windows 8.  Does that mean that GOV/MIL won't want a better secured Type-1 CHV ala XenClient, of course not.  There will be niche use cases of many different vendor technologies for years to come.  Maybe that XenCleint vs Windows 8 Hyper-V will make for an interesting next installment of my blog.   The bottom line is that Microsoft doesn't have to beat Citrix, like everything else they just have to be good enough ;)  Besides, Microsoft isn't Citrix's biggest issue right now.  Their biggest issue is their recent people/leadership exodus.  Perhaps another blog article.


Shawn, by writing such an article (a nice one btw) you should have expected a lot of comments like the one you've had :)

Even if Microsoft seems to get closer and closer  in terms of protocol capabilities, we also have to think about the Management features / capabilities (like @Stephen Rae mentionned) where RDS is now still far way from CTXS.

Not to mention the poor client side if you're not running Win 7 ...

However, I have to strongly agree with you on the "good enough" think. Even if it's still not as good as, some customers could be satisfied with the "good enought" point making them save lots of $$$.


/quote : "Besides, Microsoft isn't Citrix's biggest issue right now.  Their biggest issue is their recent people/leadership exodus" -> Sooooo true !



Thanks for the history lesson from the inside out.  Really interesting stuff and certainly a number of things I didn't know.

Thanks for sharing.



Thank you as well I learned tons!