Citrix: XenSource fills hole in product portfolio

Citrix: XenSource fills hole in product portfolio

Pending purchase will equip Citrix's application delivery infrastructure products with virtualization technologies

Where do you see XenSource technology fitting in with Citrix? What are some of the first logical integration points?

All the things on the server-virtualization side we see as very, very relevant to the back-end side of applications so that business will continue exactly as XenSource has been doing -- just kind of on rocket fuel. In terms of new integration and synergy with existing Citrix products, we very much see this opportunity in the desktop virtualization market. We think it's a $30 million to $40 million user market in the next three to four years.

But the key thing that has to happen is that desktop virtualization has got to get easier and more economical, and you have to put a premium on user experience. If you take a desktop operating system and you put it on a virtual machine in a data center, you haven't solved any problem, because you haven't delivered it to a user, and there is no user experience. It just isn't going to work. We think by driving these two together, integrating and combining the Xen technology with the Citrix Desktop Server product, which includes our operating-systems streaming and our virtual desktop system, will actually provide a great user experience.

The third thing I would point out, that even on the core Windows application-delivery space with our Presentation Server product line, which in itself represents 10% of the complete Windows Server workload worldwide today according to numbers from Microsoft. The ability to put the Presentation Server infrastructure itself on a virtual platform with the Xen enterprise technology offers a great fit that our channel partners and customers are just going to eat up. That's a bit more tactical but it is a huge opportunity we see.

What is a realistic timeline for Citrix customers to start seeing the XenSource technology integrations?

XenSource just came out as an independent company with its new 4.0 enterprise product. The have 350 channel partners today, and 650 customers. And almost all their partners are Citrix partners as well, so Citrix interested in the products today can go out get them today and download XenExpress for free to get their feet wet with it. In terms of the combined company, we expect to close the transaction in mid-Q4. We have our major partner and sales kickoff event each year in the first quarter, January or February so you can expect to see us sharing more details at the Citrix iForum event at the end of October. We may not have closed the deal by then but we will be talking about new stuff. Then at our annual event, we will be talking about what's new for the year. Those would be the next steps.

How does Xen technology change the competitive landscape for Citrix?

When you think about what Citrix has done over the past four years or so, we quietly built close to a US$1 billion company. And then in the past three years we kind of went on a tear from one product to a complete end-to-end infrastructure. As that has happened, every quarter and year Citrix has become more and more relevant and started showing up on more CIOs top-10 lists. I think the biggest thing it's done is not so much a competitive issue as Citrix has now increasingly going to be seen as one of the top five or 10 leading infrastructure players by every midsize to large enterprise company on the planet. So that is one thing, which means we are just playing in a different crowd.

The second thing that happens is that there will certainly be a relationship with Microsoft that will be enhance by this. That is a key part of the acquisition choice. What XenSource did with their hypervisor and the Microsoft Veridian hypervisor that's coming out next year is almost exactly the same approach that Citrix did 10 plus years ago with its Windows Terminal Services and Presentation Server business. I think that the Microsoft relationship gets better. And there may be more 'coopetition' with someone like a VMware. We are partners with them, they are going to exhibiting at our event in October and we're exhibiting at VMWorld, so we are still going to be partners because big infrastructure players play well together and are in multiple accounts. But there is certainly going to be more overlap with the core VMware business than there was in the past.

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