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Archive for October 2009

A new independent ITIC/Sunbelt Software survey of nearly 1,500 companies worldwide indicates 60% of respondents will deploy Windows 7. Nearly one-third of respondents — 30% — say they will migrate to the new Microsoft desktop operating system within the first six months while another 20% say they will upgrade within the year.

Among the other Survey Highlights:

• An overwhelming 80% majority of the survey respondents rated Windows 7 performance and applications compatibility with legacy applications “Excellent” or “Very Good.” See Exhibit 1.
• Approximately 11% of companies said they plan to wait until the first Service Pack ships before migrating.
• Of the 40% of respondents who had no definitive migration timetable, 25% cited satisfaction with their current Windows XP and Windows Vista desktops.
• Less than 2% of those polled said they were considering switching from Windows to another desktop OS.

The survey findings are a clear indication and validation that Microsoft’s efforts in locking down the Windows 7 code to ensure a high degree of backwards compatibility with existing and legacy hardware, software, applications and drivers, delivering a wide array of deployment tools, has been overwhelmingly successful.

To accomplish this Microsoft adopted a series of internal and external initiatives which are designed to deliver the highest degree of applications compatibility, thus ensuring a more straightforward and simplified migration Windows XP and Vista to Windows 7.

Internally, Microsoft made a concerted effort over the last two years to provide a wide array of online deployment tools and toolkits. Initiatives like the Application Compatibility Toolkit (ACT) are proactive measures that specifically allow corporations and consumers to pre-determine, whether or not their applications and drivers will work with Windows 7. ACT and other tools also enable users to troubleshoot and find solutions for technical problems. The Redmond, Washington software giant is also offering a series of online and optional premium compatibility planning and evaluation services.

To complement the free online tools, Microsoft also initiated a broad and deep “Ecosystems Readiness Approach,” initiative. Microsoft proactively engages its OEM hardware vendors and independent software vendors (ISVs) worldwide by providing them with technical workshops to train them on various aspects of the Windows 7 platform to ensure compatibility. These workshops, which are being given in 40 countries, also offer Microsoft partners a channel with which to provide direct feedback on any compatibility issues that may crop up and serve as a powerful training tool.

These actions are exactly what Microsoft needed to do in order to provide its corporate and consumer customers with a high level of integration and interoperability with their legacy hardware, driver and software applications. The ultimate test will come over the next several months as users widely deploy Windows 7 in production networks. However, Windows 7 must still prove its mettle to the 40% of organizations — commerical and academic — as well as consumers who are still skeptical and leery of potential compatibility problems. Additionally, some cash-constrained organizations, say their firms lack the funds, to migrate to Windows 7. And 26% of the 40% of respondents with no definitive migration plans, indicate they’re content to remain on Windows XP or Windows Vista for the foreseeable future. Wooing this contingent may prove to be Microsoft’s biggest challenge.

The early indications, based on the survey data and first person interviews with beta users and early adopters, is that Microsoft’s full court press to ensure applications compatibility has paid off.

Citrix today released XenDesktop™ 4, which it says is designed to “make virtual desktops a mainstream reality for hundreds of millions of corporate employees .” XenDesktop 4 incorporates a new FlexCast™ delivery technology that takes an agnostic approach, by supporting every major desktop virtualization model in a single, integrated solution. Citrix says this will result in improved ROI, simplified management and extends the benefits of virtualization to every employee in the enterprise. XenDesktop 4 further simplifies desktop computing by integrating all the capabilities of Citrix XenApp. This will allow businesses to deliver on-demand applications to physical or virtual desktops as a seamless part of their overall desktop strategy. To ensure every user gets a high-definition experience at all times, XenDesktop 4 also includes significant enhancements to its industry-leading HDX™ technology.

Another significant component of today’s announcement is that it solidifies and expands the Citrix and Microsoft partnership. The two companies compete in some areas, but in the broader sense they are united by a common goal: to overtake and trounce virtualization server market leader VMware. The Citrix/Microsoft partnership is a true alliance and one that will simplify and enhance the management of virtual desktops through Microsoft System Center. It also adds multiple enhancements that further extend the value of Microsoft Windows and Windows Server platforms. In total, XenDesktop 4 adds more than 70 new features, significantly enhancing its performance, security and readiness for large, enterprise-wide deployments.

Pricing and Availability
Citrix says XenDesktop 4 will be generally available beginning on November 16, 2009. It  will be licensed on a per user basis. This model allows each end user to use an unlimited number of connected or offline devices at no additional cost. XenDesktop 4 will be available in three editions with the following suggested list prices: 

  • Standard – $75 per user
  • Enterprise – $225 per user
  • Platinum –  $350 per user

ITIC ANALYSIS
Pros

Overall, Citrix’ today’s XenDesktop 4 product announcement as well as the company’s strategic focus on cloud computing, desktop virtualization, security, management and interoperability indicate that the company has a sound focus and is well positioned to compete with market leader VMware.

In addition, Citrix’ strong partnership with Microsoft gives the company visibility, access to Microsoft’s broad Windows customer base and deep channel. At the same time, Citrix’ XenServer also directly competes with Microsoft’s Hyper-V, a fact that company executives freely acknowledge. This might be more worrisome for Citrix were it not for the fact that the companies need each other to combat VMware, which has built up a substantial lead in the server virtualization space. In the spirit of “the enemy of my enemy is my friend,” the Citrix/Microsoft partnership will most likely remain that of a close healthy alliance with elements of friendly but spirited “co-opetition.”

Citrix’ other notable strengths are its’ leadership role in promoting Xen.org as an open source community virtualization standard and the breadth and depth of its add-on management and security products. The Xen.org initiative gives Citrix high visibility and credibility with the development community and the industry at large, which will stand it in good stead as it attempts to grow. The add-ons products should enable Citrix customers and partners to build end-to-end solutions that can be based entirely or partially on Citrix technologies.

Cons

Citrix’ as ambitions to be a top tier virtualization vendor means that it must be a top tier vendor in every sense of the word. And that means growing revenue. Light hearted jokes about the state of the economy aside, Templeton and the entire executive and product management team at Citrix understands this and freely acknowledged the fact at the Analyst Summit. Now the company must demonstrate that it can buck the trend by increasing both its sales and installed base. And Citrix must spike sales within the next six-to-nine months as enterprises begin to plan and budget for the next round of upgrades.

ITIC survey data indicates that Citrix is the market leader in the desktop virtualization space and is a close second in the applications virtualization market. Both of these markets are relatively small at present; only five to 10% of businesses worldwide have deployed desktop and application virtualization. So it’s too soon to declare any vendor a winner or clear market leader. Meanwhile, the desktop and application virtualization arenas have three strong contenders in Citrix, Microsoft and VMware. Market adoption in these segments will begin to ramp up strongly in 2010, when according to ITIC’s latest virtualization deployment survey close to 30% of corporations will begin virtualizing their desktops and applications. Clearly, these markets are stepping stones Citrix could use to establish itself in the potentially lucrative yet nascent cloud computing infrastructure market.

In order for Citrix to be a major cloud player, it must first solidify its current customer base and expand outside of its core client bailiwick. Citrix must also offer a cogent, compelling marketing strategy to complement and highlight its new product offerings. This will be challenging in the short term since Citrix does not yet possess the deep pockets of its larger rivals, VMware, Microsoft and Oracle. Citrix’ ace is its chief technology officer, Simon Crosby, who is a highly visible and regarded virtualization expert. Crosby is an indefatigable evangelist who never misses an opportunity to point out competitors’ flaws while promoting the Citrix brand.

Citrix Systems laid out a broad, bold tactical product roadmap and showcased a solid, long term strategic vision at its Analyst Summit held in Denver on September 16-17.
Desktop virtualization, cloud computing, on-demand computing, self-service IT and expanding the company’s strategic vendor alliances and channel partnerships represent the key thrusts over the next six-to-12 months, according to Citrix president and chief executive, Mark Templeton.
All of the aforementioned initiatives will also be the focus of several, separate Citrix’ fall and winter product introductions. The first announcement is slated for later today.
Templeton delivered the keynote to the approximately 70 assembled analysts, stating that as Citrix celebrates its 20th anniversary this year, the company’s goal is “to stand out from the [virtualization] crowd and avoid the status quo.” Templeton, a 14-year Citrix veteran served up some encouraging company statistics noting that while revenue has been essentially flat over the past year – which he considers a positive in the ongoing economic downturn – Citrix’ business is growing in almost every other area (see chart below). “Flat [revenue] is the new growth,” Templeton joked, referring to the company’s 2009 first half revenue of $762 million.

Citrix Expands Product Portfolio

Templeton said that Citrix is moving to aggressively solidify its place as one of the top tier virtualization vendors – along with VMware and Microsoft – by growing the business both organically as well as by acquisitions. ITIC survey data indicates that the top three virtualization vendors: Citrix, Microsoft and VMware account for 90% market share – particularly in the server virtualization arena, where VMware is the clear market leader with over 50% share. In recent months, the more mature server virtualization market has seen a spate of mergers and acquisitions, most notably Oracle’s purchase of Sun Microsystems, Inc. and niche market player Virtual Iron.

Citrix’ own purchase of XenSource in October 2007 and its subsequent partnership with Microsoft to support the Redmond, Washington software firm’s Hyper-V product have given the company a strong foothold in the server arena. Additionally, the Citrix Xen virtualization technology is embedded in a variety of operating system platforms including the open source Debian Etch; Novell’s SUSE Linux Enterprise 10 and 11; Red Hat’s Enterprise 5 and Oracle’s Sun Solaris. Dell also includes the Citrix XenServer OEM Edition as an embedded hypervisor as an option in its Power Edge Servers.

Most recently Citrix has notably bolstered its desktop and application virtualization product portfolio with the addition and enhancement of a number of key offerings including the NetScaler (Application Optimization, Application Delivery Networking, Load Balancing, Web Application Acceleration and Application Firewall).
Citrix is also exerting and extending its influence via the open source Xen.org community project, which Templeton said, now boasts more than 3,700 individual members; 250 contributing companies. Unique code contributions, he added increased 110% from 2008 to 2009. Central to the Xen.org strategy is the Xen Cloud project, which is an open source, open platform for cloud providers. It features broad interoperability among various competing hypervisors; broad industry support and serves as a platform for an overarching open source ecosystem, Templeton said.
Cloud computing is central to Citrix’ long term strategy and the company is building a wide array of desktop management and security add-ons to facilitate corporations’ migration to both private and public cloud infrastructures.
“Consumption based costs is becoming an imperative for users,” Templeton said. “If you’re not a leader in this area, it will kill you,” he added.
Citrix Ramps Up

Templeton noted that Citrix had spent $1.8 billion in acquisitions over the past 18-to-24 months, to bolster the company’s three business divisions: the Online Division; the Desktop Division and the Datacenter and Cloud Division.

In particular, Citrix intends to cement its position in the fast emerging desktop and application virtualization markets by highlighting the increasing trend towards self-service IT. According to Templeton, Citrix’ Software as a Service (SaaS) group is among the “fastest growing part of the company with over 100M online virtualization sessions” to its credit.

Templeton and Wes Wasson, the company’s Senior Vice President and Chief Marketing Officer (CMO) said Citrix’ Xen Desktop is the centerpiece of the company’s short term tactical and long term strategic plans and goals. “Desktop virtualization, Templeton and Wasson said, “can help take big chunks [reduce] the time spent on daily systems management chores” like patching and rolling out updates which consume an enormous amount of IT managers’ time.

“Our agenda is to offer the broadest set of virtualization technologies in the industry – separating desktops and applications from the physical server, to address the growing numbers of mobile, remote and telecommuting workers,” Templeton said. This is crucial he noted, because industry wide, IT spending remains flat in the low single digits. In contrast, “the velocity and amplitude of change” facing customers continues to accelerate.

“For many businesses the current infrastructure design is not suitable for the emerging dynamic business environment. Citrix is responding to market dynamics and market realities where the only constant is change,” Wasson said.

The Citrix executives said they recognize that in the current depressed economic climate, the balance of power has moved from vendors to customers. “No vendor will be successful with a lock-in strategy,” Wasson said. Hence, Citrix will continue to pursue a platform agnostic approach to ensure that its products will work in all operating system environments; the company also provides interoperability and integration with offerings from rival vendors like VMware. The company is also shoring up its partnerships with software vendors like Microsoft and Novell as well as hardware OEMs like Dell and Hewlett-Packard.

This strategy has helped Citrix garner new customer wins among large enterprises accounts. During the summit Citrix showcased corporate accounts such as Emory Healthcare in Atlanta, Ga., which uses Citrix Delivery Center to cut costs by 60% for an anticipated operational savings of $1.5 million in 2009, according to Michael Thomason, Lead IT manager. Tesco, a British based international grocery chain and retailer said it replaced 1,500 traditional servers and consolidated using virtual blade servers and Citrix XenServer technology, according to Chris Brockelsby, the company’s lead IT Director.