Citrix Online President Sees Recurring Sales For Partners

Though Citrix Systems is well-known in the channel, one of the Fort Lauderdale, Fla.-based software company's fastest-growing businesses is its lesser-known online division, which sells a menu of software-as-a-service offerings such as remote access, Web conferencing and help-desk support. In the coming year, Citrix Online expects to grow by at least 50 percent, driven in large part by replacing local help-desk support with less-expensive remote help-desk capability delivered via the Web.

Brett Caine, president of Citrix Online, gives his take on how software-as-a-service offerings are helping solution providers embrace new, recurring revenue opportunities in an interview with CRN Editor In Chief Michael Vizard.

CRN: As head of Citrix's online division, what are your goals for the channel, and how do you work with the rest of the Citrix channel?

CAINE: We're leveraging the Citrix infrastructure as we expand our business internationally. We're doing it through the channel. We've just introduced a two-tier model in Europe, and then we're launching it in the rest of the world. The Citrix infrastructure is there, so let's just put the online products through it. When we became part of Citrix, we already had our own partner network.

Now we're doing a couple of things concurrently. One is we've consolidated our partner program with the Citrix Access Network partner program. It's one program for all Citrix solution providers. In addition, we have about 1,100 partners, and about 200 of them are Citrix solution providers. That's growing more every day. We've signed 10 distributors in Europe and one in the United States, and we're rolling out Latin America. We'll probably add another 10 distributors in Europe. We also have a channel exchange program. For example, we just introduced GoToAssist into the Intel Channel Partner Program. So if you're an Intel VAR, you can get GoToAssist as part of your affiliation with Intel. In total, there are about 700 [VARs] dealing directly with us today. There are probably another 200 to 300 that we deal with through our customers, like the Best [Software] program. And then there are the 200 that we're dealing with as part of Citrix.

CRN: What percentage of your business is coming from corporate sales?

CAINE: Corporate business is about 45 percent of our business. Of that business, about 15 percent was through the channel 12 months ago. The most recent quarter was 25 percent. Exiting this year, I think it will be at least 35 percent of our business. I see that the channel will become an increasingly larger part of our corporate business.

CRN: Given your software-as-a-service business model, what makes your products attractive to VARs?

CAINE: In our business model, there's a recurring commission opportunity. More than 90 percent of our customers renew their annual contracts every year. But if you work with us and sell a new customer, we'll pay a commission up front. Then when that customer renews, we'll pay it again. We do it every year thereafter. It's expanding the footprint and ensuring that the customer renews. Every quarter, 30 percent to 40 percent of our customers buy more licenses. The partner would participate in that upside as well. I want our teams to work with the channel and educate them and make the whole thing work.

CRN: How did Citrix's online business come about, and how well is it doing?

CAINE: We started as ExpertCity. We were acquired by Citrix a little bit more than a year ago and became Citrix Online. Our approach to the market is we are very focused on realtime collaboration and remote-access services. We offer a set of technologies, products and solutions in that market, such as GoToMyPC, for remote-access service, and GoToAssist, our online support application. We believe that Web-based applications that we deliver will become as ubiquitous as e-mail. Realtime collaboration will shift the way we work together. For example, with our GoToMeeting conferencing offering, in less than three quarters, we've gone from essentially zero meetings to over 200,000 meetings a quarter. It's fast, it's easy and it's secure built-in. And we think that's driving the demand.

CRN: How well is the remote-support business doing?

CAINE: We are seeing expansion of our GoToAssist business all over the place. This product grew 92 percent year-over-year last year. We only sell to companies like VARs, IT consultants, small- and medium-size companies, and very large companies. We do not sell this product online to consumers through our e-commerce site. A VAR's customers are going to hit their portal, which we essentially host for you. For example, Best Software has offered GoToAssist to their VARs as part of a best-practices model that they want their VARs to adapt and evolve to. That's been very successful.

CRN: How easy is it to integrate GoToAssist?

CAINE: GoToAssist has open APIs, so we can integrate out of the box. If you're a customer, you can integrate GoToAssist right into your workflows to create a common view and a common dashboard. We also have a database integration module. If you want to just take the data that we capture, you can integrate that into your data warehouse and have your business-objects reporting view of it.

CRN: Are partners private-labeling your service?

CAINE: We're seeing a movement toward white-labeling. We're going to PC service providers that want to offer remote access services. This is a hallmark of a maturing marketplace, right? You want to be able to get it from different people in different ways. We want to be able to offer it to those markets where we don't have a direct touch to the customer.

CRN: The opportunity for solution providers with GoToAssist is pretty clear. How much opportunity is there for the Web conferencing service?

CAINE: GoToMeeting is growing like crazy. It just grew 106 percent quarter to quarter. More than 50 percent of those customers are switching from one of the other providers in the market. We have introduced a licensing model that is very compelling to the market. It's called All You Can Meet. For a single monthly fee, you--as an organizer--can have as many meetings as you want and for as long as you want for that flat fee. And there are no overcharges. You don't have to predict how many minutes you're going to use or how many people are going to attend the meeting. As a result, people are coming to GoToMeeting in droves. We think we're disrupting the market. The customers are saying this is a better model because it's predictive.

CRN: In the remote-access space, 3am Labs has emerged as a competitor to GoToMyPC. How do you see 3am as a rival?

CAINE: They're peer-to-peer technology. They offer essentially a free service or a free-to-fee service. It will be interesting to see if they can make free a real business model. GoToMyPC grew 56 percent year-over-year last year. It grew again in the most recent quarter over 13 percent. It's very profitable. With our reach through Citrix and our general presence in the market, I think it will be difficult for somebody to catch up to us with a free model. And for people that want something free, we offer something free. It's called the trial. You can come to our site and you can get a trial. If you get value from it, then you become a customer. I just don't know how you can make money [with a free service] in that business.