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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.

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