Citrix channel in virtual agreement

Citrix partners have largely given the vendor s decision to acquire virtualisation player, XenSource, a thumbs up, saying it will create a strong competitor to current market leader, VMware. But it remains to be seen how existing Citrix resellers with VMware certifications will be impacted by the deal.

The $US500 million acquisition will enable the application delivery vendor to enter the server and desktop virtualisation markets and is expected to close in Q4. Citrix president and CEO, Mark Templeton, hopes to generate $US50 million in revenue through XenSource s virtualisation products by 2008 and take a significant share of the market by 2011.

The XenSource team will operate as a Citrix division focused on virtualisation and management, Templeton said. Citrix plans to distribute its recently released XenEnterprise 4 product through channel partners, as well as combine XenEnterprise with its own Desktop Server and other software pieces. Both are Microsoft partners and will expand that relationship, he said.

Citrix s Australian managing director, Rob Willis, said the deal opened up new sales avenues for channel partners.

"We have seen a lot of opportunity around integrating our existing desktop technology with the server side of virtualisation," he said. "Awareness of the benefits of virtualisation has been growing -- with this acquisition we re giving partners the complete story to tell."

While most Citrix partners contacted by ARN saw value in the deal, some questioned its impact on VMware relationships and several declined to comment. Regal IT has made significant investments in skilling up in Citrix and VMware. Managing director, Mark Gluckman, said he had no interest in taking on XenSource products. "XenSource would have to do something spectacular to change our minds because we are so far down the track with VMware, " he said.

"XenSource is a very immature product and is only starting to get the same feature sets as VMware. It just doesn't compare."

However, Gluckman pointed out Citrix s channel heritage and strong partner network would make it a strong contender.

"Citrix has a very technically competent and well developed channel. That s where VMware has and will continue to struggle," he said.

Melbourne-based integrator and S Central subsidiary, ExpressApps, also works with both Citrix and VMware. Technical director, Phil Lancaster, said interest in Virtual Desktop Infrastructure (VDI) was growing.

"I think one of the major reasons why Citrix is looking at these products is to ensure it has a dominant place in VDI," he said. "There s been a big shift in popularity for these solutions. You don t just want to be a player on the edge while VMware makes all the runs.

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"Citrix would have been concerned with that distraction from being the centrepiece of delivering applications to just being on the edge."

Rather than viewing this as a battle between VMware and Citrix, Dimension Data general manager of Microsoft solutions, David Hanrahan, argued there was plenty of room to co-exist.

"There s been a lot of development in virtualisation, but in the main we are still talking to customers about fat client servers and traditional deployments," he said. "There's an enormous, untapped market for these vendors. They don t need to be winning share from each other."

Express Data is the sole local distributor of XenSource and has been a Citrix partner for more than 10 years. Communications division manager, Ian Kelly, said XenSource s data back-end focus complemented Citrix s thin client and desktop application delivery knowledge.

"It's exciting to have a genuine alternative to VMware. Having a big brand name behind it [in Citrix] will add to market dynamics. Customers won t be boxed in to one solution -- there will now be some choice."

There are currently six XenSource certified resellers in Australia but Express Data recently staged a national road show and now has more than 20 partners looking to certify.

"From our point of view, it s business as usual and we will continue to work on our original plans with XenSource to certify resellers locally and keep growing the brand," Kelly said.

But managing director of XenSource Queensland partner AfterDark, Peter Davies, took a dim view of the Citrix deal and expressed concern over how XenSource resellers would be integrated into its channel.

"The Citrix model is more sales focused, while XenSource is a very technical product. We have investigated working with Citrix before but the barriers of entry are too high and the technical resources are tied to sales targets," he said.

"I can t see how they will integrate partners -- to be a Citrix partner, we would need to have technical and sales resources and meet revenue targets. It would be a $40,000 investment. And this doesn't make sense in a market place where the level of profit is being driven down to the point where it s just a volume sale."