There have been numerous stories bouncing around in the last couple of days concerning pricing of virtualization products along with technological differentiation discussions; who has what? Who is doing what? etc with regards to both Citrix and VMware among others. I’m sure that you all will agree with me that this industry if full of competitors, each one out there working to beat their respective competition. We hear every day about how VMware says this isn’t true about XenDesktop/XenServer and Citrix saying that they can do this and they can do that vs. VMware/VDI, etc.
This got me to thinking hard about how the companies in this industry can do things differently. By that I mean that there has been no one breaking into new territory from a ‘customer value’ perspective to create new demand for their products. But instead they focus on “bundling” products and giving the impression that the customer is getting something for nothing. Remember the old adage people, “there is no free lunch”. This rings true today. There will always be a catch somewhere. But if the companies in this industry are serious about breaking away from the pack, then they will have to rethink their corporate and “go-to-market” strategies.
Brian has highlighted the pricing questions around the latest “bundling” of the XenApp and XenDesktop products; there was a great survey just released on the spending on virtualization products is increasing when other software sales are slumping. I just saw an interesting question posted by Tarry Singh that asks some pretty interesting questions on this subject.
I see this as the perfect storm to have Citrix, VMware, or, for that matter, Microsoft create a whole new marketspace by reducing costs and driving up value for the customer. Let’s face it, the technology (virtualization and application delivery) is proven so I don’t foresee any really groundbreaking innovations there in the near future. “The only way to beat the competition is to stop trying to beat the competition”. But how do they do that? They need to concentrate on value innovation.
Ok, now I know you are dying to know, “what the hell is Value Innovation?” Value innovation is the strategy of making your competition irrelevant by not focusing on beating them, but by creating a leap in value for buyers and for your respective companies. Once companies do this, they will open up new and uncontested marketspaces. This is a major shift in strategy for any of the companies in this industry, but the water is so choppy from all the competition that someone needs to find “calm seas”. By pursuing differentiation along with low cost, these “calm seas” can be found. These “calm seas” represent that new, uncontested marketspaces.
So what would this look like from a Citrix perspective? Imagine XenApp Platinum with all the features integrated in (XenDesktop, XenServer, Provisioning Server, EdgeSight, EasyCall, SmartAuditor, WANScaler client, etc) and you could serve up applications, content, OS’s to any VM (either XenServer or VMware) all for one price. Now that opens up a lot of questions, like “what would you charge for that?” I don’t know, but look at the bigger picture here, what a leap in value for the customer and for Citrix (or VMware or Microsoft, or Ericom, whomever).
So what would it take Citrix? VMware? Microsoft? Think about the value to the customer and to own a huge uncontested marketspace.
Maybe I’m crazy, but just think about it.