Quest Software has acquired Provision Networks. (press release) Provision's main product, "Virtual Application Suite," is an application and desktop delivery product that's very cool but suffers from the fact that Provision is a small company that no one's really heard of. But now that they're part of Quest, this could change.
The market opportunity
The market is right for a real competitor to Citrix in the “application delivery” space. (Or more specifically, the “Windows application delivery” space.) Citrix is huge, slow to develop new features, full of quality-control issues (How many hotfixes have they had to re-release?) and not really in touch with what the market wants (printing and profile management are still big issues ten years later).
Citrix has also grown comfortble not having any competition in this arena. Their Presentation Server product has truly had ten years of being the only option for server-based computing. (Really, their competition was convincing people that SBC was the way to go versus non-SBC. But if you went SBC, you went with Citrix. Citrix has been able to charge any price they want, and you had to pay it if you wanted SBC.)
Now Citrix sees VMware as their main competitor. Personally I think that’s a flaw in their strategy. Citrix’s “application delivery” messaging is perfect. They don’t have to compete against VMware to be successful. I think Citrix is just jealous of the fact that VMware’s market cap is 4x bigger than their's after three months being public, and they're jealous that VMware got 2-3x as many people at VMworld than iForum after just three years. Of course Citrix is a public company, so their #1 obligation is to shareholders (sorry customers, this is the reality of the world in 2007). Shareholders want growth, and Citrix can get more growth in the hardware virtualization space than in the pure application delivery space for the next few years. So is Citrix being true to themselves and their vision by going after XenSource? Does it even matter as long as they grow?
The problem is that I don't view server virtualization as anything more strategic than I view the choice of server hardware vendor. Sure it's "strategic" to some people (like those of us in IT responsible for running all these servers), but just as the business doesn't care what hardware platform its servers run on, it also doesn't care whether they're virtualized or not.
IT is about applications. Applications are strategic to companies. The only reason servers exist is to support applications. Citrix knows this. But for some reason they're chasing this hardware virtualization tangental market.
The time is right for someone to focus on application delivery and to challenge Citrix in this space. I think it will make both companies stronger and customers will be the ultimate winners.
What will Quest do with Provision?
It's interesting that the press release from Quest mentioned them buying the "VDI vendor" Provision Networks. I know virtualization is hot. I know VDI is hot. But the real reason I love Provision is because they bridge the gap between VDI and Terminal Server-based server-based computing. They view their "farms" as collections of resources for delivering applications and desktops, whether those come from single user (VDI) or multi-user (TS) systems. But the press release makes me nervous because I hope that Quest doesn't view Provision as "just" a VDI vendor. (Of course Quest is a public company, so they have the same growth pressures that Citrix has. So if VDI is hot right now, then I guess that's what they feel they have to do.)
I hope Quest will not try to enter the hypervisor or hypervisor management market. Forget the hypervisor. Let Citrix/Microsoft/VMware fight over that. That’s all religious battle territory anyway, and it’s going to be hard for one vendor to convince people to replace whatever they have. Plus the VMware IPO and the Citrix XenSource purchase mean that Quest would have to spend way too much to buy anything in the that space.
Instead I think there's still value in being "hypervisor-nuetral." When Citrix first announced Desktop Server, they marketed it as "desktop platform-neutral." They encouraged people to use blades, Xen, VMware, Virtual Iron, or whatever they wanted. (Yay!) But as soon as they bought XenSource, they renamed "Citrix Desktop Server" to "Citrix XenDesktop" and bundled the Xen-based hypervisor and management into the product. At iForum they said, "Oh sure, of course we'll still support 'other' virtualization solutions," but how do you think that will really play out?
Provision Networks has done a great job in the hypervisory-neutrality area. I hope that Quest continues this. Let the virtualization vendors fight each other over control of a commodity. Instead, Quest can truly focus on the application delivery. The market for terminal server add-on products has got to be in the $600M per year range. (Does anyone have real data on this?) The VDI market will probably be that big somewhat soon too, but in addition to, not at the expense of, the TS-based SBC market.
Quest recently bought ScriptLogic (a company that's exhibited at Citrix iForum in years past). Hopefully they can integrate the ScriptLogic and Provision stuff into a single product. Maybe throw in some printing? (I have to do some further investigation into Provision's stuff here.) Maybe a kick-ass portal to tie together SBC apps and desktops and local apps and streamed app? Maybe tie in with some SSL-VPN vendors to hook application policies into endpoint scans? Maybe look into some solutions for managing disk images? (Or maybe that's too close to the hardware virtualization space? I need to think about that some more.) All-in-all, I think Quest could make a very serious offering against Citrix. Price the whole thing at like $200 or $300 per user and they've got a winner!
The bottom line is that I hope Quest doesn't go virtualization crazy and ruin this whole thing. I still think application delivery has some long legs, and the market really wants a choice besides Citrix. So if Quest can sneak in there while Citrix is focusing on hardware virtualization, a little competition in the space will make everyone better in the end.
Financial Data for those who are curious
Annual Sales: $1.3B
Market Cap: $7.5B
Annual Sales: $1.1B
Market Cap: $30B
Annual Sales: $500M
Market Cap: $1.6B