Anytime, Anywhere, Any Device: Citrix Wants to Do It All
Citrix has built a global company that wants to "play well with others" and has struck up some key partnerships in the process.
"Playing well with others is our DNA," says Citrix Systems Inc. President and CEO Mark Templeton. Whether it be with a longtime business partner like Microsoft, major players such as Cisco Systems Inc. and Amazon Web Services LLC, or an innovative up-and-comer like Kaviza, Citrix instinctively seeks out complementary relationships that open up doors to lucrative agreements that put its products on center stage. Call it uncanny, call it "co-opetition," call it smart business sense -- Templeton has forged a formula that works time after time.
Of course, playing well with others requires you to have the right products and services to play with, and Citrix is succeeding there with a blend of old and new that's unique in its scope, ranging from aging but still lucrative warriors like MetaFrame Server and Presentation Server, to cutting-edge desktop virtualization offerings like XenApp (the successor to MetaFrame Server and Presentation Server), XenDesktop and XenClient.
"Going back to day one, trying to connect different types of devices to a multi-user Windows system meant that you had to play well with Microsoft, with networks of all types, and devices of all types."
Mark Templeton, President and CEO, Citrix Systems Inc.
The beat goes on with the NetScaler application delivery platform for Web apps and clouds, and Software as a Service (SaaS) in the form of Citrix Online and its GoTo suite (now available in French and German). Citrix Receiver is the new universal client that enables on-demand delivery of virtual desktops and Windows, Web and SaaS applications to a wide range of devices associated with Windows, Mac OS/iOS, Android, Linux and Google laptops. OpenCloud is Citrix's primary cloud offering.
Given this wealth of technology, Citrix's goal is simple and straightforward in its intent: Deliver applications, desktops and workspaces to end users no matter where they are, and on whatever device they're using.
IaaS and SaaS as Game Changers
Simon Crosby, the always-outspoken CTO of the Citrix Datacenter and Cloud Division, is anxious to talk about cloud and Infrastructure as a Service (IaaS). The cloud, he says, is hot, but "ephemeral" in the sense that it's a broad term that Citrix makes more specific for its enterprise and service-provider customers through Citrix OpenCloud, a platform of products created for large enterprises and cloud services providers.
As Crosby explains it, "In our world, cloud encompasses not only Infrastructure as a Service, but also Software as a Service. Remember, we're a major SaaS provider with Citrix Online, and we can say that within the SME [small and medium enterprises] segment, where Software as a Service is a no-brainer, that the interest level is extremely high." In order to capitalize on that interest, Citrix is expanding its Citrix Online suite of GoTo products with the addition of high-definition video collaboration and a new partnership with Skype Ltd.
The CTO sees an "enormous" IaaS trend in securely delivering the enterprise presence to any device that users want to employ. Driven by runaway growth in the mobile market and the infrastructure requirements associated with it, Crosby says that Citrix is developing "the right Infrastructure as a Service" based on NetScaler, which currently sits in front of some of the world's largest Web sites and delivers the most demanding forms of content and mobile apps to next-generation devices. Having made Citrix's position clear, Crosby gets in a couple of shots at arch-rival VMware Inc. by noting Citrix's support of WAN optimization (which VMware lacks), and saying, "IaaS is not just more enterprise server virtualization, or virtual machines from a cloud provider."
So how is Citrix coming along in its bid to populate enterprises with heterogeneous mobile devices? Simon Bramfitt, founder and principal analyst for Entelechy Associates LLC, gives the company high marks. "When IT is no longer controlling the preferred mobile platform that its business users bring to the table, you have to have a very broad range of options to provide your preferred endpoint on," Bramfitt notes. "From that perspective, Citrix has got the most complete vision of any of the server-hosted, desktop virtualization vendors, and certainly seems to be reaping the rewards."
Chris Wolf, a research vice president for Gartner Inc. IT Professionals Service, is more succinct, saying, "Device ubiquity is a work in progress. I don't know if you've tried to run Microsoft Word through Citrix Receiver on an iPhone, but you'll probably only do it once."
Asked if he sees a commoditization of hypervisors within datacenters, Crosby says that through the use of the free XenServer (the survival of which is no longer a constant topic among bloggers), Citrix is commoditizing entire virtual infrastructures, including network management, storage and compute -- in addition to optimizing the best placement of virtual machines (VMs) via live relocation.
"It's simply a requirement for everything that we do and monetize, so the quicker we can drive the industry to that point, the better," Crosby says.
Bramfitt agrees with Crosby's views, saying, "Within the internal datacenter, I think we're going to see an increasing commoditization of the hypervisor itself. From that perspective, it's highly likely we'll see a greater market share of hypervisor platforms moving away from VMware toward Microsoft and Citrix." He further suggests that under the circumstances, VMware might be wise to reduce its hypervisor prices and compensate by adding more value to its management capabilities, as Citrix has.
Wolf takes issue with both Crosby's and Bramfitt's comments on hypervisor commoditization, saying that hypervisors are becoming almost as "sticky" as database software. According to him, it's not that users can't just convert a VM, because vendors provide suitable tools for that task. The issue he cites is the operational software -- backup, security, capacity management and configuration management -- that gets tied into the hypervisor.
"VMware's competitors really don't have a good answer for that, and the longer it continues, the more VMware becomes entrenched," Wolf comments. "That's not to say the competitors are not making inroads, because they are. Citrix is doing very well, especially getting XenServer in the datacenter as the back-end for virtual desktop workloads, and Microsoft is starting to see some traction as well."
Referring to the OpenStack project, which is based on IaaS technology, Crosby attempts to marginalize VMware's IaaS strategy by saying Citrix is working with 50 other vendors and 250 engineers every day to commoditize OpenStack. OpenStack is a collection of open source technologies delivering a massively scalable cloud OS that's supported by a global software community, which is collaborating to enable any organization to create and offer cloud-computing services running on standard hardware.
"We'll shortly have massively scalable distributed object storage, and massively scalable distributed cloud compute that will blow away anything that VMware can produce," Crosby claims. "It will be absolutely free and absolutely open and absolutely open source, and it will support any hypervisor." He adds that in addition to supporting XenServer, OpenStack support has also been added for Hyper-V and ESX.
While Wolf agrees that Citrix's participation in OpenStack is good, he doesn't buy into Crosby's claim that OpenStack will provide Citrix with a market-changing competitive advantage over VMware. As he puts it, Citrix is moving in the right direction with its OpenStack efforts, and there's "some momentum" behind its open, extensible framework. Also positive for Citrix, Wolf says, is the fact that VMware is still somewhat limited in its management hierarchy, which doesn't provide a capability to extend metadata so users can do their own management customizations -- a capability that Citrix has. Wolf also describes his conversations with a large financial institution that has been on VMware since the early days of ESX, but recently "brought in" Citrix, in part due to its OpenStack commitment.
"OpenStack is emerging as the alternative to vCloud, and Citrix is establishing itself as a formidable competitor to VMware," Wolf declares.
Welcome to Battle Desktop Virtualization
In many ways, desktop virtualization is ground zero in the battle for enterprise hegemony that's being waged primarily between Citrix XenDesktop and VMware View, with the Microsoft Desktop Optimization Pack (MDOP) running a distant third. A year ago, it looked like Citrix had a narrow advantage, but now there's a growing belief that Citrix is the clear-cut market leader, largely because of its FlexCast delivery technology and enhanced, high-definition HDX adaptive technology protocol.
Crosby's reaction to a question about who's winning the protocol wars between XenDesktop and VMware View is predictably blunt: "There's no war as far as we're concerned. There might have been a skirmish at some point."
In Wolf's assessment, Citrix has a technical edge, and VMware needs to be "more transparent" with its directions for both VMware View and its PC-over-IP (PCoIP) protocol, as the lack of feature set and limited WAN capabilities of VMware View have hurt VMware significantly in head-to-head pilots. Notably, he says, XenDesktop has done "exceedingly well" against VMware View in very large enterprises, where big-bucks contracts result in huge cash infusions.
Despite giving VMware relatively low grades in high-end enterprise environments, Wolf says that VMware is competitive in both the SME space and in regionalized deployments where technology may take a backseat to business requirements. For example, Citrix's WAN capabilities may be of little use to a regionalized customer. This fight also revolves around brand allegiances, which Wolf says could favor VMware, because when VMware has a strong relationship with a datacenter team or client team, it is sometimes given deals without Citrix even knowing the deals existed. However, he adds, there are situations where the tables are turned and Citrix is the benefactor.
Bramfitt minces no words about this battle, saying, "As much as VMware would like you to think differently, Citrix is a long, long way ahead of VMware. There are certain circumstances where VMware can offer an attractive user experience, but they're lagging years behind Citrix when it comes to the flexibility of application delivery through their protocol -- no question about that at all."
XenApp: Ultimate Cash Cow
Citrix is anything but a one-product company, but one product -- XenApp -- makes most of its money. Originally known as MetaFrame Server, and subsequently Presentation Server, XenApp hosts applications on central servers and enables users to interact with their applications remotely or by streaming them to user devices for local use.
Cutting to the bottom line, Citrix says its FY 2010 breakout for desktop solutions revenue was $1.14 billion against overall 2010 revenues of $1.87 billion. The company won't break out revenues between XenApp and XenDesktop, preferring instead to break them out in three distinct categories: the desktop business, which was responsible for 60 percent of 2010 revenues; cloud and datacenter, which accounted for 20 percent; and collaboration, which comprised the final 20 percent.
The XenApp technology is so popular that MetaFrame Server and Presentation Server still exist -- in a very profitable way for Citrix. According to one virtualization admin who asked not to be named, "I don't have any quantifiable subscription numbers, but I believe the support and software maintenance alone is a fortune. At my previous company, we had about 10 MetaFrame servers and the yearly cost was about $30,000 -- for providing us with very little, other than someone to call if it broke."
Notes Wolf, "It's a brilliant strategy on behalf of Citrix. They have home-court advantage with XenApp today. It's already entrenched in many enterprise accounts and Citrix has offered them a trade-up program. Plus, bundling XenApp and XenDesktop gives them a competitive pricing advantage against VMware."
VDI: A Niche Solution?
Bramfitt has his doubts about the lopsided Citrix revenue mix, saying the situation isn't healthy for any company, especially one selling server-hosted desktop virtualization, which he calls "a niche solution." He further asserts that the majority of application delivery needs can be better met through XenApp than XenDesktop, and its core Terminal Services technology delivers much more service for the number of sessions coming out of a single server.
Specifically, Bramfitt believes the cost per session for an application delivery mechanism is far lower than the cost per session of a desktop delivery mechanism, so in his opinion, it's inevitable that as the popularity of desktop virtualization fades, more and more enterprises will wake up to the idea that there's still a lot of life left in XenApp.
As XenApp ascends, Bramfitt predicts that an increasing number of companies will see that distributed desktop virtualization -- XenClient in the case of Citrix -- will deliver more value than XenDesktop. "So we'll see XenApp being the strongest leg of the stool for a few more years, and then XenClient will take the lead for Citrix thereafter, with XenDesktop as a bridging solution today, and as a niche solution in the future, rather than being the leader that a lot of people seem to think it will be for Citrix," Bramfitt predicts. "While VDI [Virtual Desktop Infrastructure] solutions have their place, they're not the universal solvent that many people thought they would be."
In production since last October, XenClient is currently serving the security market, where regulated industries and agencies are using it to secure multiple environments with a common platform using a single device. With XenClient, user data is automatically and securely backed up whenever the device is connected to the Internet, which ensures corporate information is secure and can be quickly restored if a device is lost or stolen.
While Citrix has grabbed a lot of headlines with XenClient, VMware has been building a formidable competitor of its own, based on the company's Type 2 hypervisor, which is compatible with VMware Player, VMware Fusion and VMware Workstation, and can run on most OSes.
"From the bring-your-own-PC perspective, VMware View Local Mode can touch a lot more devices today than Citrix can in terms of getting a virtual desktop locally on a user's system," says Wolf. "That's where I think Citrix needs to be a bit more aggressive in terms of partnering with other vendors that can help them in that area. Personally, I see Parallels as a natural fit for Citrix."
Mark Templeton: Making It Happen
Mark Templeton would make a great secretary of state. He's a highly intelligent, solutions-oriented person blessed with an intuitive sense of how to work with people. Driven by his restless curiosity and a fascination with the future, he could turn an international incident into an opportunity to advance the common good.
During his 13 years at the helm, Templeton has turned Citrix into a successful, forward-looking company that has cashed in on the endless need to deliver applications, and developed into a full-fledged organization with 4,600 employees and a wide range of products in use by hundreds of thousands of organizations around the world.
In 2010, Templeton -- who says he spends 90 percent of his time thinking about the future -- presided over a year that saw Citrix's stock price nearly double, and revenues rise to $1.87 billion, an increase of $26 million over 2010.
Wolf says, "Mark Templeton's a great CEO. He gets the market extremely well." In Wolf's opinion, much of Templeton's success can be attributed to his mutually beneficial deal making with other vendors. Examples include AppSense, RingCube Technologies Inc., Wyse Technology Inc., Cisco and Kaviza, in which Citrix invested money and embedded technology.
As a strong advocate of driving consumerization into the workplace, Templeton has strongly promoted the Bring Your Own Computer (BYOC) movement. Now, in keeping with Citrix's campaign to deliver everything on every device, he has amended BYOC to "BYO3," which stands for Bring Your Own 3 devices: smartphones, tablets and laptops.
And then there's Microsoft, Citrix's longtime, invaluable business partner. Templeton has kept that relationship on track by working closely and comfortably with Bob Muglia, former president of Redmond's Server and Tools Business, and other key execs such as Corporate Vice President of Management & Security Brad Anderson. However, that picture changed on Feb. 9, 2011, when Muglia, who will leave Microsoft this summer, was replaced by 19-year Microsoft veteran and former senior VP Satya Nadella.
Templeton looks forward to working with Nadella, and it will be interesting to see how that relationship develops. Wolf notes that Anderson, who works closely with Templeton and Crosby, remains very influential at Microsoft, and will continue playing a key role in the evolving Microsoft-Citrix relationship. Wolf also predicts that Nadella will "focus even harder" on Hyper-V, along with virtualization and management.
Microsoft's position on desktop virtualization as it relates to Citrix is a widespread topic of speculation. For example, Bramfitt says, "There's a lot of doubt in my mind that
Microsoft really is doing any more with desktop virtualization than the barest minimum they need to get by." The more conventional wisdom has been that the company has been happy to send Citrix its high-end desktop-virtualization projects because it will make life more difficult for VMware, which is accorded boogeyman status in Redmond.
This more conventional thinking seems to jibe with Templeton's take on the situation, which is that Microsoft is satisfied to incrementally build up sales of MDOP across a broad segment of its SME customer base, which will eventually bring desktop virtualization business to Citrix. MDOP is based on six technologies: Application Virtualization, Advanced Group Policy Management, Asset Inventory Service, Diagnostics and Recovery Toolset, Microsoft Enterprise Desktop Virtualization and Microsoft System Center Desktop Error Monitoring.
Microsoft also offers its VDI Suites (Standard and Premium) with MDOP available as an add-on to the Premium version. Bramfitt calls VDI Suites "excessively complex," adding, "It doesn't meet the needs of anything but the smallest percentage of Microsoft customers."
Templeton, who thrives on competition, was circumspect and complimentary when asked for his reaction to VMware chief Paul Maritz's presidental title being divided among four new co-presidents, while Maritz retained his CEO job. Templeton was largely unwilling to speculate on what was going on behind the scenes, because he said he just didn't know. He did compliment Maritz as a competitor and a person, saying that he thought the VMware CEO was involved in the formulation of the plans that called for his title change.
It just goes to show you that two fierce competitors can go all out against each other and still maintain a civil relationship. That's the kind of diplomacy you'd expect from Mark Templeton.