The industry pulse after the Citrix / XenSource acquisition

Yesterday Citrix bought VMware competitor XenSource for $500 million. We wrote two original articles about this that now have over 80 comments.

Yesterday Citrix bought VMware competitor XenSource for $500 million. We wrote two original articles about this that now have over 80 comments. There have also been another 50 or so articles published on other industry websites and dozens of blog entries about this deal. I’ve read every single one of them that I can find. In this article I’m going to try to summarize the more interesting theories and comments about what this acquisition means.

The thoughts fall into several categories. Let’s start with the biggest thing on everyone’s mind.

The Price

Citrix is paying $500 million for XenSource. XenSource has almost no revenue for 2007—certainly less that $10 million. Blogger Savio Rodrigues tackled this head-on. Correct me if I’m wrong but wouldn’t it take a lot less than $500M to develop competing technology to Xen? Alternatively, it’s open source, so Citrix could have forked Xen and had the technology for next to free. However, building a competitive offering or forking Xen would not deliver the user base of Xen, the linkage with RHEL/SUSE or the Linux kernel in the future. Tell me that this deal had to do with acquiring a brand and a user base / widely distributed technology. Don’t tell me this is about innovation that can’t be matched by larger Traditional vendors.

Sure Citrix could develop their own Xen, but how long would that take? Buying makes a lot more sense. And I think we can put that price in perspective a little bit. Citrix’s press release said that XenSource is forcasting $50 million revenue for 2008. Philip Winslow, an analyst for Credit Suisse, pointed out that a “10x 2008 revenue multiple on the expected $50 million revenue contribution...is within the range of recent transactions associated with the server virtualization market of 11-14x 2008 revenue.”

And if you don’t believe that XenSource can do $50 million in 2007, Winslow goes on to write, “From a market share perspective, $50 million in XenSource revenue represents approximately 2.5% of the virtual machine market in 2008--which we view as achievable.” (You can download the full Credit Suisse analysis of the Citrix / XenSource deal as a PDF at the top of this article.)

One final note on price. On the analysts call this morning, Citrix Marketing Chief Wes Wasson said that Citrix expects the XenSource unit to result in a “$200m business over the next couple of years.”

Citrix had over $900 million in cash, so maybe $500 million wasn’t that far off? But still, is Citrix crazy or brilliant?

Citrix is crazy

In the comments of the article Gabe and I wrote last Thursday about this deal (a “rumor” at the time), Tim Mangan wrote, “A XenSource purchase would not be good for the industry nor for Citrix Customers, especially if Citrix keeps up the practice of "bundling" these technologies. Eventually Citrix will need to break out the technologies better to let customers buy just what they need.  But how long before we get to that point?”

Citrix is brilliant

Of course there are plenty of other people who think this deal was the most brilliant thing that Citrix could have done. An eWeek article quotes The 451 Group analyst Brenon Daly as saying, "Citrix built a $1 billion-plus business on the back of its access to Microsoft source code. XenSource's exclusive access to Microsoft's forthcoming 'Viridian' hypervisor code is a key driver for this deal," he told eWEEK Aug. 15. "For Citrix, Viridian becomes the base operating system component for its next business, just as Windows Terminal Server has been for Presentation Server."

The 451 Group also released an analyst report yesterday. In addition to what was mentioned in the eWeek article, the report discussed how else this deal could help Citrix. Quoting from the report, "Citrix could give XenSource the channel infrastructure it needs to put real price pressure on VMware, while Xen's crucial and growing relationship with Symantec/Veritas—remember XenSource CEO Peter Levine was an early employee at Veritas—gives it links into the storage world that will play well with enterprise customers and provide Citrix a counter to VMware's relationship with EMC."

My own thoughts on this are that this XenSource thing will be a really positive thing for the Citrix channel. Application delivery and virtualization have been going hand-in-hand for a while. (Just look at our website.) This is a much more natural fit than Citrix trying to convince it’s Windows application channel to push SSL-VPN appliances or HTTP acceleration appliances.

While we’re still on the topic of good things that can come out of this acquisition, here’s another thought from Savio Rodrigues. (Remember he is not a Citrix guy.) “By the way, how many of you have heard or thought about Citrix in the past 5 years? Did anyone know they have revenues over one billion dollars? Exactly. This acquisition is as much a reason for Citrix to get back in the public/customer/investor eye as it is about a technology acquisition.”

Case-in-point, even the Associated Press did a story about this deal!

What does Microsoft think?

This seems to be the most hotly-contested aspect of the deal. Does Microsoft like the fact that it’s global ISV partner of the year just bought a competitor to a competitor? Confused? Microsoft loves Citrix. Microsoft hates VMware. XenSource hates VMware. Citrix buys XenSource. Does this mean that Microsoft loves XenSource? (common enemy) Or does this mean Microsoft hates XenSource? (competition)

On the surface, it appears that Microsoft is supportive of this deal. From the press release:

The acquisition will also strengthen each company’s strong partnership with Microsoft and commitment to the Windows platform. As an independent company, XenSource has built a strategic relationship with Microsoft designed to ensure broad interoperability between XenSource products and the upcoming Microsoft Windows hypervisor, code named “Viridian”. This relationship complements and broadens the successful partnership between Citrix and Microsoft in the Windows application delivery, application networking and branch office infrastructure markets.

“Although the market is still in the earliest phase, virtualization already offers significant opportunities for cost savings and innovation,” said Bob Muglia, senior vice president, Microsoft Server & Tools Business. “Citrix and XenSource have long been strong partners for Microsoft and it is exciting to see them team up to help move the market forward.”

However, a visitor posting as a guest on BrianMadden.com yesterday shared these thoughts:

I thought it would be fun to dissect Muglia's quote:

"Although the market is still in the earliest phase, virtualization already offers significant opportunities for cost savings and innovation,"

i.e. Server virtualization has only affected 5% of x86 servers according to IDC. It's still early days. Citrix can do what it wants for the next 12 months. Viridian comes out and only Microsoft and VMware will matter.

"Citrix and XenSource have long been strong partners for Microsoft"

i.e. Citrix and XenSource are both Microsoft ecosystem partners. They can waste their money, kill each other, [and] try to slow the adoption of VMware until we come out with Viridian. If you are fighting against VMware, you're on my team--until Viridian comes out.

"and it is exciting to see them team up to help move the market forward."

i.e.  It's a thriller / horror / blood-bath movie made in Bollywood. It will be a flop in the theaters, but at least it's not my money. So you have my blessings. Go right ahead, but get out of the way when Viridian comes out.

But getting back to what Microsoft really thinks about this deal. Another guest posted the following on BrianMadden.com yesterday:

"Do you really think Citrix would buy a major hypervisor player in a fast growing market without talking to their biggest partner (Microsoft) first? My guess is that Microsoft has known about this for quite some time and given their blessing at the highest levels. If Microsoft told Citrix this was a mistake, Citrix would be insane to make this deal."

Industry expert Benny Tritsch agreed, also posting a comment to yesterday’s article

“Microsoft knew about the Citrix plans to acquire XenSource and even encouraged Citrix to do it. In this case an important virtualization technology is kept within the eco system of friends. VMware would not be very happy about this situation, the MS-Citrix relationship would even be stronger than before.”

He continued in another post, “What if Microsoft deliberately wants Citrix to buy XenSource, which may prevent Microsoft from legal issues regarding their potential market domination with virtualization products. What do you think VMware would do if Microsoft bought XenSource? They would probably try to prevent this by suing Microsoft. But if Citrix buys XenSource, there is nothing VMware can do.

But why should Citrix do what Microsoft wants them to do? Well, Microsoft and Citrix are so friendly to each other during the last years. Microsoft did not include new TS features into Windows Server 2003 R2, which gave Citrix more time to develop their own new product features. Citrix never supported Linux seriously, Citrix moves from their Java Console to an MMC snap-in; both is good for Microsoft. Not even the discussions around Softricity and Tarpon caused any serious trouble in the Microsoft-Citrix relationship. At this year's Citrix iForum Europe and Microsoft Tech-Ed US both vendors made sure how much they like each other (except if you listen to former Softricity folks). And from an economic point of view it works perfectly, Citrix was never more successful as today, strictly following the path that Microsoft proposes them to go. So to me, Citrix acquiring XenSource, would make a lot of sense -- independent of what Citrix really wants to do with XenSource. From a strategic standpoint it could be true that controlling a technology is more valuable than delivering the same technology as fast and as expensive as possible...”

But Benny didn’t stop there. He also posed a second possible scenario:

“Microsoft planned some move Citrix didn't like. So Citrix decided to do the first move in fighting back - by acquiring XenSource. If this is the case we will not have this eco system of friends anymore, even if Microsoft knew about the Citrix plans. VMware and all the Citrix competitors would love this new situation because of the changes in the market landscape it could generate.”

This is certainly interesting—the notion that Citrix did this as a defensive move. But what about the Bob Muglia quotes in the press release? Personally I think that even if Microsoft was secretly very upset about this, they’d still have to act like they support it in public. After all, Viridian is still a long ways away, and Microsoft wouldn’t want to give Citrix / XenSource the “public credit” of being a threat. So they say “Oh yes! Of course this is great.”

Another guest poster from our site took this a step further:

“The market share turf battles have just begun. Let’s imagine that Citrix is secretly working on Presentation Server for Linux. Brian once wrote an article on this.

You optimize XEN to work well with Presentation Server for Linux. You use free application software such as star office and others. Citrix starts promoting/advertising that all you need is Citrix user licenses. No MS Office, No MS operating system, No annual fee to MS....etc.  You install free Linux on all your client computers or use an inexpensive thin client. You have just saved your company 75%+ of its annual Software expenses.

Oh - you can run PS 5 for Windows 2008 to support legacy Windows Applications in the same farm as PS for Linux. All servers point to the same Data Store.”

But let’s take a step back for a minute. I want to go back to the notion of Microsoft and Citrix plotting together to make this acquisition. Another guest poster to our site from yesterday took that a step further:

“It’s possible that MSFT was having even more difficulty than originally anticipated with Viridian and is going to miss the "180 days after WS 2008" launch. In order to not let VMware capitalize on the opportunity, they encourage Citrix to buy into this high-growth market, by assuring Citrix that it has 24 months to sell the existing product and innovate well behind this to continue to have a value proposition in excess of what Viridian has (after all, isn't this what CTXS has done for years with TS?). CTXS has had high growth ambitions since it started its acquisition strategy several years ago. This helps drive this growth and helps the Microsoft relationship. Long-term, Viridian will rule, by then, XenSource needs to have moved on to greater things.”

One poster on BrianMadden.com yesterday believes almost the same thing, but with a totally different outcome. (One that will benefit VMware rather than Citrix / Microsoft.) He or she wrote:

“This would be great from a VMware point of view! MS is delaying almost all the relevant hypervisor features in Windows 2008 SRV, and if Citrix would buy Xen it would mean the elimination of the last major virtualization competitor. We all know Citrix's track record for acquisitions....they pretty much stink....Sequoia anyone ??”

Does this make Citrix a more attractive target?

One aspect of this deal that several people are suggesting (that I did not consider at all) is that Citrix acquiring XenSource will make them (Citrix) more attractive to potential buyers. Now they have a $1+ billion enterprise business plus one of the last real hypervisor players, anyone else who wants in the virtualization market might have to go there now.

Some people are suggesting that Microsoft might try to buy Citrix now. They also mentioned that HP or Cisco would likely be interested in buying Citrix, which is an idea that I’ve floated before and I think makes a lot of sense.

Will Citrix still support the open source Xen?

Of course Citrix is buying a commercial company called XenSource. The actual virtualization engine is an open source project called “Xen.” (Xen, by the way, is the engine on which several other virtualization companies are built, including Virtual Iron.) That said, XenSource was the primary driver behind Xen. But what will happen to that effort once Citrix owns XenSource?

Rachel Chalmers wrote in eWeek that "Citrix and XenSource are discussing spinning out the open-source Xen project into a nonprofit foundation, as IBM has done with Eclipse."

XenSource CEO Peter Levine said, "Think of the open source Xen project as being run by the community. XenSource is involved as leader and active partner but there is a separation between what XenSource does with its commercial products and what goes on in the Xen open source community. To continue to promote open source leadership we'll be working on an independent body to help manage and take over the Xen project."

Others aren’t too sure. On BrianMadden.com yesterday, Mike Nelson wrote, “One thing is for sure, when Citrix gets involved, you can kiss Xen's open source initiatives goobye. And that is a very sad result. They'll see only $$ signs now, and if history holds true, open source can't play in their sandbox, cause Citrix will keep stealing their shovels.”

The bottom line?

Hard to say. My personal opinion is that it will take Microsoft a while to get Viridian to where it can be a true competitor to VMware, so in the meantime, they’ll be all over Citrix and XenSource. But once Viridian is released, look out!

Personally I need to do more research. I need to learn more about Viridian, more about XenSource, and figure out the real difference between the various technologies in the market. We’ll definitely be sharing more as we learn it.


CTXS_8_15_2007_XenSource.pdf

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I really wonder what kind of sum we are talking about if MS, HP or other major players were to buy Citrix ...

If XenSource cost $500 mill, maybe 100 times the revenue they have, we should be talking enormous and ridiculous amounts ...

And now that Citrix has made their move, Xen as we know it today might disappear. I think the speculations that a large part  of this takeover is based on the access to Viridian sourcecode, is a key point. The much talked about understanding between Citrix and Microsoft that made this deal possible, could contain the "death" of Xen and produce a Citrix branded product building on Viridian components, as Presentation Server today is based on terminal Services ...

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Citrix is making the customer pay for bundling software the customer does not want. Yes - I know it makes more money for Citrix at the customer's expense.

I will never think about implementing Citrix Streming Applications because it requires Presentation Server. What if I want to run simply Terminal Services for a certain department or certain company? I will go with a stand alone products such as MS-SoftGrid before I even consider running Password Manager or Application Streaming (Tarpon). These products are bundled with Presentation Server which I think is a major customer disadvantage.....but since when did Citrix care about what the customer thought. 

I do not think anyone who has investigated Password Manager in detail would implement it because of the administrative and support overhead. Citrix advertises that this product will reduce support calls to the helpdesk. The truth of the matter is that it increases calls to the help desk. The normal user has a hard time understanding Password Manager and gets frustrated. Citrix does not even use this product company wide internally which speaks volumes.

Morale of the story: Do not bundle Xen with any other product! Unbundle all products from Presentation Server and sell them separatly. Let the customer decide and do not force this with bundling. The Access Suite is not sweet to the customer. The product either stands on its own merits or it doesn't.

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I guess that it would be a $10 to $15 billion deal. Even for the big players, such as Microsoft, EMC, HP, or Cisco, this would definitely be a big bite; and probably hard to digest. But if some crazy investor says "That's the way to go -- let's buy Citrix" who knows what's gonna happen.

Hey, ever thought about Sun? If they bought Citrix, they would own the full desktop virtualization solution portfolio, covering all platforms. A joined Sun and Citrix would own Solaris (including some cool virtualization technologies), Tarantella (now Sun Secure Global Desktop), Sun Ray, Java (!!!), Windows and UNIX presentation virtualization (aka CPS), a desktop broker, XenSource, and Ardence. Add Sun's good standing in the Linux and Open Source Community, and their contract with Microsoft. This could generate a new powerhouse in the virtualization market (Jonathan, can you hear me?)...

Just kidding, I don't really think that Sun plans to do this ;-) I only wanted to bring some new aspect to this discussion, showing that there are so many options. The acquisition of XenSource influences so many different technologies and vendors that it's hard to predict what's gonna happen next.

I'm all exited to see the next guesses here on this forum.

Benny

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Thanks for sharing the Credit Suisse report Brian, and the thoughts of other rIT industry bloggers. Those opinions are much more informed than mine or any of these other posters who have never run even a million dollar company (or in most cases, any company at all) but think they know how to run a billion dollar company.

 

 

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You don't need a CPS license to stream for each user beyond the basic small pack of CPS enterprise.  You can then buy much cheaper per user seats for streaming.  You don't need platinum (Password manager, etc) either. Check your facts before you post.
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What i want to know is who will be next for Citrix, XenSource is a great VM solution however compared to VMware, its still missing a number of componants. Conversion Tools and Inventory Tools to name a few, surely they will have to start looking at companies like PlateSpin if they want to compete against VMware in this market?

 

 

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Here are a couple of choice quotes from an eWeek article -

 

"I've been in the technology journalism business for over 20 years and one of the other truisms of the business is that nobody, and I mean nobody, partners with Microsoft and wins in the long run. There is, however, an exception to that rule. That exception is Citrix."

 

Considering Citrix has won or been a finalist for Microsoft's Global ISV Partner of the Year Award, he has a good point. That parntership certainly isn't any where close to perfect, but it is workable and has seen Citrix grow from $123 million in 1997 to over $1.1 billion in 2006. Despite numerous predictions of their demise, Citrix has grown revenue 10x since the first licensing MultiWin to MS.

 

"You can argue that it's not only the most well-known open-source virtualization program, but technically the best. On the other, you have a company that knows how to thrive while competing with that great white shark of software, Microsoft. Put them together, and you not only have a great future for open-source virtualization, but a company that can give VMware all the competition it can handle and more."

 Read More -http://www.eweek.com/article2/0,1895,2171394,00.asp 

Total speculation here. Up until the aquisition of Expert City, Citrix was very inventive at finding ways to screw up an an aquisition. But considering the fact that Citrix Online is growing at about 100% a year, Net6, NetScaler, and WanScaler are in the magic quadrant and Ardence is generating a ton of buzz, it appears they have learned some painful lesson from that Sequoia debacle. My consulting opportuntities certainly have increased a great deal.

 

(For the copyright police - Only two paragraphs quoted, and commentary around both. I think I am covered under Fair Use). 

 

 

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Citrix's stock price is up 0.19% today. I must agree with Benny.  Wall Street seems to like the deal.
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Bundling is such a horrible idea that Citrix has grown revenue from $588 million in 2003 to over $1.1 billion in 2006. Obviously Citrix customers cannot stand that idea and refuse to purchase more software. That doubling of revenue must be from selling those fantastic consulting services and tech support, and perhaps some bridges in Brooklyn. Maybe you can sell some business consulting services to Citrix, since you clearly have your finger on the pulse of the industry.
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Not anymore. It's down 0.43% now. The Street seems to be flip-flopping a lot.  What say you, Benny? 
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Brian,

Your original post on this subject was "Should Citrix buy a hipervisor". I think this goes to the heart of the issue here because, ultimately this is what Citrix did not do - they did not buy a hipervisor.

Simply put, XenSource does not own the hipervisor - Xen is Open Source. Given this, XenSource could not sell it, and as a result, Citrix did not buy it. Case in point, Virtual Iron, a XenSource competitor, also uses the Xen hipervisor, and they will continue to use it after this deal.

If Citrix did not buy a hipervisor what did they buy? What they bought is a set of management tools for this hipervisor. Where this gets really interesting is that the XenSource guys should be able to re-purpose these tools for Viridian. Indeed Peter Levine, XenSource CEO said “We will be building dynamic virtualization services and management tools on top of Viridian,” he added. “We will build the same set of products we’ve built on top of Xen for Viridian. We’ve already hired a team to go do that up in Redmond.”

Does this ring a bell? It should. It seems to me that Citrix is looking to strike the same deal with Microsoft regarding virtualization that it has regarding Terminal Services: Microsoft provides the underlying infrastructure and Citrix provides the enterprise solution on top of it. If this is true, then this purchase was probably done with Microsoft’s blessing, and positions Microsoft and Citrix as partners against VMware.

Time will tell.

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Since the XS purchase rumors hit the street (8/8/07), CTXS stock is down 20%.  Need I say more.
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On Aug 8, CTXS opened at 36.72. (It closed higher that day.) On Aug 15, the day the deal was announced, CTXS closed at 32.27. So that's 12% difference.

And during that same time, the NASDAQ went from 2612 to 2458, a drop of 6%.

So Citrix's stock is down, but it's not 20%. 

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And while the NASDAQ did drop 6% during that period, VMware managed to go past 60 when in fact everyone was expecting it to open at 29. 

6%, 12%, or 20% is a big deal no matter how you slice it.  What's 12% of their market cap?

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Nobody in their right mind expected it to *open* at 29.
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Last time I checked, we are all techies, not financial gurus.  The outperform target price is $43. Patience and time will tell.  VMWare is currently down $2.21 (3:34 pm est time).
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Excuse me, Gordon Gecco!!! I didn't know you're a part-time Investment Banker.
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There comes a point when bundling too much makes the system too bloated and expensive for anyone.

 Remember Back Office Server? 

A la Carte Applications are much more palatable for clients, and easier to mix and match components as needed.

I hope the hypervisor product stays out of the bundling process, much like the Access Gateway is now.  We have yet to sell any seats of platinum, due to the sticker shock and the inclusions of products people just don't want.  (password manager)

Yet we still have some of the largest sales in the area dealing solely with PS 4.5 and CAG.  Having a seperate product will better allow us to attack the market space. 

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First, I am a Citrix employee, and use Password Manager every day when I access our production published applications.

We do unbundle. You can purchase CAG, Password Manager, and EdgeSight outside of CPS.

You do not need to acquire a full CPS license for every user of Application Streaming either? Yes, there is a minimum number of full CPS Enterprise licenses you need to acquire , but beyond that you can add App Streaming licenses without CPS. 

 Bundling is a glass half-full or half-empty proposition.

 We get asked for both - bundled and unbundled.

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An article titled "Provision Plans Portable Virtual Desktops" was posted today on www.computerwire.co.uk.  It seems to offer a fresh perspective on things.

 

Cheers!

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Stop worrying about what impact this is all going to have on the wider community, and have some sympathy for us Citrites who are undoubtedly gonna have to start using Microsoft Virtual PC instead of VMWare Workstation or Server from now on :-(
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Yea... those poor peeps!
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Hi Brian,

This comment seems to strike to the heart of it:

If Citrix did not buy a hipervisor what did they buy? What they bought is a set of management tools for this hipervisor. Where this gets really interesting is that the XenSource guys should be able to re-purpose these tools for Viridian. Indeed Peter Levine, XenSource CEO said “We will be building dynamic virtualization services and management tools on top of Viridian,” he added. “We will build the same set of products we’ve built on top of Xen for Viridian. We’ve already hired a team to go do that up in Redmond.”

It might be worth adding this to the article? ;-)  Shades of TS all over again? And now we are also starting to see why Microsoft has been holding out on being open about VECD pricing? Would anyone care to bet that Virtual Desktop pricing will be kept behind SA and Vista Ultimate until after the release of Viridian?

I look forward to Brian sharing his thoughts and reseach on Viridian

Dave

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This is a well put statement.  I think you hit the nail on the head.  This is an innovation that will extend Microsoft products
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Just in case you needed to know... CTXS closed the day down $0.48 and VMW closed the day down $0.72.  The market had one hell of a ride today droping almost 300 points and rebounding to only being down just under 15 points.   So overall, time will really tell.

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Not sure of where you are getting your information, but most of what you have stated is not even close to the truth.

 

I know for a fact that Citrix uses CPM in house for their global Citrix farm.  Several of their large enterprise customers have deployed CPM and are very happy with the results.  CPM is not hard to implement and is very easy to manage.  Most of my customers have learned the tool in a matter of a day or so without formal training.

 

As far as bundling, you can purchase most Citrix products separately.  CPM, EdgeSight, Access Gateway (all three versions), Desktop Server, Ardence, NetScaler, WANScaler, App Firewall, and EdgeSight for Load Testing can be purchased separately.  Application Streaming is the only exception.

 

If you are going to post something, at least make sure you have your facts straight.

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Customers are buying up Platinum Left and Right. A lot of customers love the bundling because if they need 2 products they may get a few more products they find value from later on for free. As for CPM what is your problem with it? It is the Best ESSO product top to bottom.

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If you can't sell Password Manager, I feel for you.  It's a no-brainer for companies that run large Citrix environments.  The SSRP function alone pays for the product with a huge reduction in help desk calls.  And why would someone have sticker shock if you show them Platinum next to Enterprise pricing?  It's $450 vs $600 SRP -- hardly sticker shock considering you get Password Manager, CAG, EdgeSight, ICA Recording, etc with Platinum.  Platinum is a no-brainer for many companies.

 Now back to the topic of Xen....Citrix is NOT going to bundle it with Platinum.  You can bet on that.  Why would they?  It's a completely different entry point within many companies.  Go listen to the analyst call - Citrix is going to create a separate division - much like Netscaler is part of the Application Networking Group.  It doesn't take a genius to figure out they'll also create a separate division for Xen and create product "specialists" for it.  You don't go to $200m in revenue for that product within 2 years by not creating models of scale.

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Atari!
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You can get real VECD pricing TODAY - speak to your VL reseller / account manager.  No secret.
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They are buying it left and right now because Citrix finally started adding value to it.  The addition of Edgesight (NOT Password Manager) is what made the Platinum line sucessful.  Before, with Access Suite, the only real thing you got was Password Manager and many large customers already have a SSO solution in place.  What about UAG license?  You typically only need a fraction of those as you do normal seats.
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Perhaps, but what do you do if the customer is only delivering a single application or already has a ESSO production in place?

Also, the CAG license doesn't fit in well with Platinum.  Most companies only use a fraction of their PS licenses for external use.  It's like charging for CAG License on a per seat basis when it's really CCU.

ICA Recording isn't available yet (2 years and waiting), and not every company needs that functionally.  Those that do will more than likely need features that the initial release will offer (such as synching with an Aspect switch so a supervisor can listen to audio as well as see the recording)

Having said that, Platinum is a hugh leap from what it used to be (Access Suite) and because of that customers are more open to talking about Password Manager and/or Edgesight.  And like you said, with the price difference it's a no-brainer.

Joe

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I think if you look at the Citrix CPS business in general, it gernally plays on the fringes of the enterprise. They've built a billion dollar business on that. Clearly CDS is a new business that Citrix is aggressively going after, so Xen makes a lot of sense, as a CDS enabler. This will help Citrix move to the closer to CORE of an enterprise which is a much bigger pie, and will allo them to grow beyound the 1 billion mark. If MS, HP, CISCO etc come shopping, that's fine, hopefully not for a while to kill progress like they typically do. VMWare is a clear threat to MS and Citrix, so this another reason to do this. Veridian will be what it is when it comes out. MS products play to the masses and Citrix plays to the real corps and complex use cases today with RDP vs ICA, Terminal Server vs Presenation Server. No reason this pattern will not continue. Citrix can move faster than MS, and MS makes money from their sales, so this is no threat at all. I think this is a good move, and Citrix shareholders should be pleased that they are helping shape the industry. Another key point I think is that it will be important for Citrix and VMware to play nice for a while, to avoid customers getting totally pissed off. The way I see it; Citrix has many more of the pieces of delivery, Access, etc, VMWare is weak in those areas, but has the best hypervisor. To this space needs to mature, and they need to figure out how to play together for a while. This stuff is going to really COOL to watch playout over the next few years.  
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Very interesting perspective....

 Massimo.

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It depends on what your market is.  On the smb market 15-150 seats SSPR is not as big a deal.

I even had an enterprise client re-design their network design after looking at deploying 1000 terminals to run 1 application, specifically cause another vendor was pushing platinum.

After being in this field for 12+ years I have seen bundling offered, and see it get pulled.  Ala carte is easier to manage and maintain and sell.

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Well, it's true that Citrix can't "buy" Xen as in acquiring exclusive use of it.  But they can acquire the skills of the people who contribute over 50% of the code, which definitely helps drive a superior product.  Who do you trust to fix and extend it -- the guys who wrote most of it, or randoms who pick it up and sniff at it once in a while?

 

Also, by the way, Virtual Iron may use Xen, but they don't ship Xen -- at least, not something they're legally entitled to call Xen.  Unlike any other providers (XenSource, Linux distros), they've made enough incompatible changes that they don't qualify under the "faithful implementation" language of the trademark policy and are not allowed to call what they sip "Xen."  (They tried to stir up FUD about being told they had to pay for a trademark license, but no such policy exists -- you don't think Ubuntu pays to use a trademark, do you?) 

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Hold on to your wallets, folks.  It isn't a done deal yer.  Some are saying there is going to be a bidding war for this company.  This article says it will be Microsoft!  http://www.thedeal.com/servlet/Satellite?pagename=NYT&c=TDDArticle&cid=1186574743494 
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And by the way.  I find the thought of Microsoft buying Open Source unthinkable. 
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