Citrix in Sync: Thriving Among the Virtual Competition
Citrix cashes in on its Xen offerings even as it competes and cooperates with its rivals.
Citrix Systems Inc. is a company with a different agenda than most of its IT industry counterparts. Where other vendors strive for success by beating their competitors head-to-head and seizing market share like so much gladiatorial booty, Citrix views itself as more of an enabler -- a company that succeeds by working with, not against, its perceived competition.
At a time when hypervisors are largely viewed as commodities, Citrix solutions are increasingly supporting models from major vendors. This hypervisor-agnostic approach focuses the company on building a management layer that augments XenServer, VMware ESX and Microsoft Hyper-V.
As Virtualization Review founding editor Doug Barney wrote in the March/April 2008 debut issue, "While Citrix has a complete virtualization platform, it's not overly religious about pushing its own platform. In fact, Citrix is more than happy to support its own and Microsoft's hypervisors" ("Citrix Aims High"). Barney went on to quote Peter Levine, now Citrix senior VP and general manager of the Data Center and Cloud division, who said, "I always expect us to have two product areas based on two different hypervisors [Xen and Hyper-V]." Barney followed up with this observation: "The main goal for Citrix is building value on top of the core virtualization infrastructure."
This is a noble quest, and a business strategy that has paid substantial dividends -- but it hasn't insulated Citrix from the dog-eat-dog world of corporate competition. In that world, Citrix has been harshly scrutinized for the shortcomings of XenServer in the server virtualization market, where VMware has carved out a lucrative, iron-clad leadership position, and Microsoft has been cast as The Next Big Thing.
Make no mistake about it, Citrix would have loved if XenServer had captured a sizeable share of the server virtualization market and taken VMware down a notch, but XenServer is still viewed as a critical component in the company's current -- and ongoing -- virtualization strategy.
According to Citrix CTO Simon Crosby: "Everything we do relies on virtualization in one form or another. For example, XenServer is a fundamental component to XenDesktop and XenApp, which is a $1.5 billion business. And, it's now the foundation for the strategic direction of NetScaler, our application-delivery platform for Web apps and clouds, which is something like a $300 million business."
XenDesktop (formerly Citrix Desktop Server) is Citrix's desktop virtualization/Virtual Desktop Infrastructure (VDI) product. XenApp (formerly Citrix Presentation Server) is the company's long-standing -- and high-earning -- application virtualization and delivery product. For example, in 2009, even though it was linked with XenDesktop, XenApp accounted for $1.5 billion of the company's $1.16 billion in revenues. (Also in 2009, Citrix outgrew VMware in revenues, 8 percent to 6 percent.)
"We look at XenApp and XenDesktop together because both of them bring the value proposition of virtualization to the desktop."
Mark Templeton, President and CEO, Citrix Systems Inc.
Emphasizing the foundational importance of XenServer, Crosby says that while traditional XenApp customers could support 40 to 50 users per server, now using the new Intel Xeon 5500 series CPUs (code-named "Nehalem") with XenServer, they can support 500 to 600 users per server. This would allow customers to consolidate XenApp implementations by a factor of 10, while also slashing their power consumption and vastly reducing the servers they need to manage. Crosby's goal is to reduce the nearly 1 million XenApp servers in use to 100,000.
Burton Group Senior Analyst Chris Wolf has a slightly different take on Crosby's consolidation plan.
"The consolidation numbers are impressive," Wolf says, "but when they talk XenApp, they're talking about several deliveries in one sentence, and the consolidation numbers are going to be very driven by the specific way you're delivering apps."
As he notes, in the case of streaming applications to a physical infrastructure (but not posting them on a server), the end result is more likely to be impressive consolidation densities; but in the case of presentation virtualization, where the applications are being run on a server, it's a different model. Under those circumstances, the density is going to be high, but not necessarily 500 to 600 users per server. This is true, Wolf notes, because there are too many variables to make an unequivocal assertion, and results will vary based on the number of sockets, the amount of memory and other factors.
Challenges of Multi-Hypervisor Environments
As it's highly unlikely that a resurgent XenServer will begin displacing legacy VMware infrastructures, Citrix's best bet for getting its foot in the door at established VMware shops is as a second hypervisor -- a trend that's slowly developing. According to Wolf, however, this approach is challenging for large enterprises because it requires them to introduce additional lifecycle-, configuration- and capacity-management tools for the second hypervisor.
He goes on to note that this second hypervisor approach may be best received in enterprises where there's a clear-cut split between server and desktop business units. In these environments, where there are already separate management tools in place, Wolf says it's "a little easier" to implement a second hypervisor.
"An example is organizations using XenServer as a platform for their XenApp farm, and at the same time having long-term plans to seriously look at XenServer as a back-end for their virtual desktop workloads," Wolf explains.
Although the blogosphere has been rife with speculation about Citrix dropping XenServer in favor of Microsoft Hyper-V, Citrix insists it will continue introducing a new version of the product once a year. The most recent version, XenServer 5.6, was in public beta during mid-March, and is expected to be available sometime after April 16. Highlights of the beta version included dynamic memory control, automated workload balancing and StorageLink Site Recovery for business continuity.
"Everything we do relies on virtualization in one form or another."
Simon Crosby, CTO, Citrix Systems Inc.
The Marriage of XenApp and XenDesktop
Citrix has merged XenApp with XenDesktop in the Platinum and Enterprise Editions of XenDesktop 4. In support of this union, the company is currently running a promotion in which XenApp customers can trade up their existing licenses for twice the number of XenDesktop 4 user licenses. VMware has also integrated its ThinApp and View 4 products. However, according to Greg Shields, a contributor to Virtualization Review sister publication Redmond magazine: "XenApp is quite a bit more than ThinApp. XenApp does traditional presentation virtualization in addition to application virtualization, while ThinApp only does application virtualization -- albeit on par with XenApp."
So why mess with XenApp's success? According to longtime Citrix President and CEO Mark Templeton: "We look at XenApp and XenDesktop together because both of them bring the value proposition of virtualization to the desktop. They interoperate, they work together, so we really look at those two products in a single category that we call desktop virtualization," Templeton says.
Despite their combination, however, Templeton says XenApp and XenDesktop actually serve distinctly different purposes. XenApp is a product for delivering applications in an on-demand fashion that can be used in two ways: One is for projects where delivering applications is difficult, either because of the applications themselves or connectivity issues. Templeton mentions as an example an offshore project or another scenario with a powerful application that requires access to vast amounts of data, such as a business intelligence system. The way to get maximum performance in that instance is to centralize the application, which plays to the strengths of XenApp.
Templeton says the second optimal use and "rising-star dimension" of XenApp is as part of the overall desktop virtualization stack, where the goals include basic functions such as virtualizing applications, user preferences and even data.
"The trade-up program is designed to allow customers to leverage their XenApp investment into a larger investment -- a more strategic investment, if you will -- in desktop virtualization," Templeton declares. He adds that another way to look at it is that XenApp is getting a new lease on life as part of the very strategic, high-growth product line that is XenDesktop.
XenDesktop: The New Flagship?
Without a doubt, XenDesktop is the leading feel-good story at Citrix these days. Its VDI implementation has been praised by a variety of industry experts, the company's desktop expertise is highly credible and the potential market is huge.
"The delivery capabilities in the Citrix suite are a superset of what you get with VMware View alone," says Shields. "XenDesktop's desktop focus, along with the application and session delivery focus of XenApp, has the potential to better right-size application delivery for business requirements."
"XenDesktop has really now become the flagship product of Citrix," says Mark Margevicius, vice president and research director at Gartner Inc. "Technically, XenDesktop offers some of the most advanced features in the area of hosted virtual desktops. It's not 100 percent complete, but it's most certainly good enough for many customers that are getting started. The primary competition is VMware View, which is a good product, but not nearly as feature-rich as Citrix's offering."
XenDesktop 4 claims a couple of significant advantages over View 4, starting with its use of FlexCast delivery technology, which Citrix says allows IT to deliver any type of virtual desktop in a VDI environment to any user on any device. Each desktop is tailored to meet the performance, security and flexibility requirements required to provide the best desktop experience to every user.
XenDesktop 4's newly enhanced HDX adaptive technology, which includes the ICA protocol, was unveiled as part of the XenDesktop package last fall. HDX was designed to provide high-definition delivery regardless of device or network -- while reportedly using 90 percent less bandwidth than competitive solutions. It's being compared to View 4's use of the PC-over-IP (PCoIP) protocol, which VMware says compresses, encrypts and encodes the entire computing experience at the data center and transmits across a standard network to end points. The compression algorithm adapts dynamically with existing conditions to enable the optimal user experience for any network connection.
Via its use of FlexCast, Citrix says XenDesktop 4 fully supports Citrix XenServer, Microsoft Hyper-V, VMware ESX and VMware vSphere, whereas Citrix claims View requires that virtual desktops be run only on ESX, providing no ability to migrate to other infrastructures.
For companies just getting started in desktop virtualization, Citrix is offering an Express Edition of XenDesktop 4 that includes 10 free licenses. It's available for download here.
Margevicius gives HDX an edge over PCoIP, saying, "PCoIP shows promise. It's significantly better than what VMware had been using under RDP [Remote Desktop Protocol], but writing a protocol is still pretty hard to do from a technical point of view." He continues: "It's our belief that we need to wait and see at least six-to-nine -- maybe even 12 -- months of maturity before we're actually comfortable saying, 'Yes, this is as good as what Citrix is doing with ICA and HDX.'"
The Microsoft Relationship
Much has been said and written about the joint development agreement between Citrix and Microsoft, which has been in place for 20 years. Recently, much of the buzz has centered around why Microsoft sticks with Citrix when it has the Hyper-V and System Center technology that could enable the company to go it alone. According to Templeton, the agreement is about joint collaboration in the area of leveraging Windows Server, whether it be with Terminal Services or Hyper-V. He says customers benefit because they get prompt access to innovative products based on Citrix's unique technology.
"When I think about the best way to work with us, I use Citrix as the example."
Brad Anderson, Corporate VP, Management and Services Division, Microsoft
Any reasonable doubts about their future relationship were laid to rest on March 18, when Microsoft announced new agreements calling on two companies to jointly enable HDX technology to "leverage and enhance" Microsoft RemoteFX. Microsoft RemoteFX is a set of RDP technologies being added to Windows Server 2008 R2 SP1 that, according to Microsoft, enables users to "watch full-motion video, enjoy Silverlight animations and run 3-D apps -- all with the fidelity of a local-like performance when in connection with the LAN."
Microsoft also made clear it's willing to go the extra mile with Citrix against VMware by announcing two programs directly targeted at the market leader: "Rescue for VMware VDI" and "VDI Kickstart." The former lets Microsoft customers receive up to 500 XenDesktop VDI Edition annual device licenses and up to 500 VDI Standard Suite licenses in exchange for their VMware View licenses. The latter allows those same Microsoft customers to save more than 50 percent on Microsoft VDI Standard Suite and Citrix XenDesktop VDI Edition.
Together, these agreements amount to a major coup for Citrix, which is better positioned than ever to thrive in the emerging, highly lucrative desktop virtualization market.
Despite the HDX kicker, Templeton says the Citrix-Microsoft relationship is not primarily based on technology.
"Most of our agreement with Microsoft is not at the technical level," he says. "It's more about the customer and the go-to-market level because we run on public APIs like all ISVs do, and from time to time we do collaborate on a particular project, whether it's a networking project or something on Terminal Services."
Brad Anderson, corporate vice president of the Management and Services Division at Microsoft, oversees all the management functionality built into Windows, including Windows Update, Group Policy and Windows PowerShell. He also oversees such management products as App-V, Microsoft Enterprise Desktop Virtualization, and all of the System Center products -- Configuration Manager, Operations Manager and Virtual Machine Manager. Anderson reports to Bob Muglia, president of Tools and Server Business, and meets monthly with Gordon Payne, senior vice president and general manager of Citrix's Desktop Division. Along with Muglia, he and other Microsoft execs meet quarterly with Templeton.
Anderson has nothing but good things to say about Citrix, calling it "indisputably" the leader in presentation virtualization and praising the company for its joint work with Microsoft on bringing XenApp together with System Center to the benefit of both administrators and end users.
"When I think about the best way to work with us, I use Citrix as the example," he says, adding that Microsoft and Citrix consider each other to be "really important" partners. Based on Templeton's leadership, Anderson says, a great deal of confidence exists between senior leaders of both companies.
Wolf calls the joint relationship "tremendous," citing Microsoft's history of successfully tying its applications to infrastructure technologies, and Citrix's track record of tight collaboration when it comes to sharing device drivers and management capabilities.
"Strategically, the relationship is a very big deal, because if Citrix is able to deliver Windows applications to the huge marketplace that awaits them, it will remain competitively strong and well-positioned for continued growth," Wolf notes.
Citrix Essentials for XenServer and Hyper-V
When it comes to management, Citrix prospered via Presentation Server, which was effectively a set of management improvements to core Terminal Services. However, the company needs a continuing management presence, and Templeton wants to be "a good citizen in the systems-management landscape," which means plugging into popular systems management tools such as System Center, HP OpenView and offerings from the likes of IBM Corp. and CA. Of course, he also wants to provide the best-possible management capabilities for Citrix products, be they management tools and capabilities around server virtualization or desktop virtualization and "application networking."
This drive led to Citrix Essentials for XenServer and Hyper-V, two infrastructure-management packages designed to help customers get the most out of their virtualized server and desktop environments. Essentials for XenServer Enterprise is included in XenDesktop 4 Platinum and Enterprise Editions as a licensed component. Essentials for Hyper-V Express Edition is provided free with XenDesktop and it's integrated with the Platinum, Enterprise and VDI Editions of XenDesktop 4. The Enterprise and Platinum Editions of Essentials for Hyper-V are not included with XenDesktop.
Like his boss, Crosby also recognizes the importance of Essentials in terms of competing strongly and making sure Citrix customers in the traditional server virtualization market are guaranteed a satisfying experience with XenServer. However, he says Essentials revenues -- "in the tens of millions of dollars" -- pale in comparison to those of XenDesktop, XenApp and XenNetScaler. "So we're quite happy with the fact that the Essentials business is not the only metric by which we judge our success," he states.
XenClient is a bare-metal, local desktop-virtualization platform based on the same technology that goes into XenServer, including the open source Xen.org hypervisor.
XenClient enables users to run multiple virtual desktops -- for example, personal and secured lockdown environments -- locally on the same device in complete isolation without sacrificing performance. The primary source of this performance is the hardware-assisted virtualization in the bare-metal Xen hypervisor, which is optimized for Intel virtualization technology and other features of Intel vPro technology.
According to Citrix: "This new client hypervisor, which will be made available to PC manufacturers and enterprises worldwide, will enable IT professionals, for the first time, to dynamically stream a centrally managed corporate desktop and all related applications directly into a secure, isolated, client-based virtual machine. This new technology will be productized in an upcoming solution from Citrix, code-named 'Project Independence.'"
Templeton is particularly enthusiastic about the possibilities available in multiple virtual desktop environments. "One of the projects that's near and deal to my heart is the whole notion of employee-owned PCs, otherwise known as the BYOC movement," he says.
The Xen Cloud Platform Initiative
Citrix is also well positioned for future business via its participation in the Xen Cloud Platform (XCP) initiative. XCP was announced by Xen.org and is designed to provide an open source cloud infrastructure platform that will streamline the path to cloud implementation for enterprise users by enabling cloud services providers to offer services that are compatible with legacy virtualized application workloads.
"It's incredibly strategic to Citrix that not only do we enable our customers to use the cloud, but we enable our cloud partners to get the best efficiency and least cost implementation of virtualization for their deployments," Crosby says.
Wolf says Burton Group clients also view the cloud as strategically important, and see it as a long-term investment that they'll use where appropriate to help them cut costs.
"Citrix has to go there, and they need to go there quickly because VMware, for example, sees that the market is heading in that direction and they've been extremely aggressive," Wolf says. "They've signed up more than 1,000 services providers to deliver cloud services on VMware infrastructures."
In the final analysis, Citrix will continue to marshal its many assets -- strong leadership, desktop virtualization, the Microsoft relationship, a large and diversified customer base -- as components of a strategy that exploits the company's feel for the market and its unique view of the competitive process.
"We've not only survived -- we've thrived," Templeton says. "I think that when it comes to virtual computing and the outlook going forward, the opportunity is large. Microsoft and VMware don't have to lose for Citrix to win, and through great strategic and operational execution, we'll be able to carve ourselves a very important role in the industry. The truth always prevails, and as I've said before, we'll continue to do the right thing every day with a focus on the customer. That's how we built the company, and that's how we're going to keep going forward."