BusinessWeek has an interesting article pointing out that while they don’t really compete today, Microsoft and Cisco will have about $20 billion of product and market overlap in the next six years.
Citrix has a rich history with Microsoft, but as they evolve away from pure "applications" and into the "application delivery platform," Citrix will compete more and more with companies like Cisco as well. (SSL VPNs, Netscaler application switches, Teros application firewalls, etc.)
So the question I have is that if Microsoft and Cisco atart tearing each other up in this space, where does that leave Citrix? How will Citrix fit? Will they even be able to adequately compete being "only" a $1 billion company.
It really comes down to the product mix. Citrix offers a lot of innovative products today, but both Microsoft and Cisco will evolve and develop their products to compete in this application-focused world. Citrix will have to out-innovate them to survive. The problem is that Citrix's most innovative products today are from small companies that they bought. (Citrix Online, the Net6 SSL VPNs, and pretty much everything that Netscaler makes) But now that these small and nimble companies have been swallowed up by the goliath that is Citrix, will they still be able to truly innovate, or will they become “footnote” competitor in the duopoly that is Microsoft and Cisco?
While I'm thinking about Cisco, I think it's worth looking into what they are doing, because they are becoming more relevant to us "Citrix folks." One of Cisco's big strategies nowadays is to focus on how to build more application intelligence into the network itself. They call this “Application Oriented Networking, or AON.”
Meanwhile, Citrix is talking about an “access platform” which focuses on application delivery.
Maybe Cisco would want to buy a company like Citrix? This could help Citrix compete against the big guys in the application space, and it could help Cisco compete against the software-only companies like Microsoft. (And with $25 billion a year in sales and almost $5 billion in cash, Cisco can pretty much buy anyone they want).
Cisco could add Citrix’s application delivery appliances to their lineup for delivering VoIP, web, and upcoming .NET apps, and they could evolve Presentation Server to really focus on delivering ICA applications via their hardware (which is something that Citrix is talking about doing with their own hardware anyway). The future of Presentation Server (in terms of Project Constellation) is focused around making the whole application delivery system more “smart” (autonomic load balancing, health and performance monitoring, etc.), and fits nicely into Cisco's AON strategy. And since Longhorn Terminal Services will include many of the "core" Presentation Server features, Citrix's future was starting to look fairly Cisco-esque anyway.
The bottom line is that both companies realize that focusing on the application delivery is more than commodity items such as routers, VPNs, or seamless windows.