Cisco and Citrix may be allying in the application delivery controller (ADC) market where they've previously competed, but the No. 1 player in that market says the move will be bad for the company's partners.
Dean Darwin, senior vice president, worldwide partner organization, at F5 Networks, said ADC-focused solution providers should be wary of a relationship that involves multiple vendors and too many questions.
"It is very hard to preserve channel margins and ensure opportunity protection in a two-vendor strategy model," Darwin told CRN when asked if the Cisco-Citrix alliance would challenge F5. "There's just not enough margin to go around and it causes a lot of confusion for partners. It also introduces a lot of channel conflict that, frankly, neither company has had a great track record of solving."
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Cisco and Citrix, which already partner in several areas related to data center and virtual desktop infrastructure, this week expanded their strategic partnership more broadly into cloud-based networking.
Among the announced moves were that the two companies would integrate Citrix's NetScaler ADC with various Cisco network and security technologies, and that Cisco will recommend Citrix NetScaler to customers as an ADC alternative to its own declining Application Control Engine (ACE) load-balancer products.
That's not the OEM move that was heavily rumored heading into the announcement, but it does mean Cisco will endorse Citrix's NetScaler and reference-sell it.
The deepening of Cisco-Citrix ties follows Cisco's decision in September to cease development of ACE. Several application delivery networking vendors, such as F5, A10 Networks and Radware, and also smaller players like Array Networks and Embrane, immediately expanded their trade-in programs to aggressively target Cisco's shrinking, but not-insignificant ACE customer base. By most analyst estimates, Cisco commands about an 11 percent share of ADCs, beneath Citrix's 19 percent to 20 percent share, and paltry compared to F5's market-dominating 49 percent to 50 percent.
Analysts see the Cisco-Citrix ADC alliance as no immediate threat to F5 given that the go-to-market model is still a work in progress and is not an OEM or reseller arrangement.
"Our understanding is that during Phase I of the agreement, the two co's only plan to develop a reference architecture and joint marketing collateral, and have no plans for a reseller agreement," wrote Morgan Stanley researchers Ehud Gelblum, Kimberly Watkins, Stanley Kovler and Jeremy David in a note to subscribers this week. "Cisco would refer accounts to NetScaler salespeople on a case-by-case basis, but since the sale will be through Citrix, Cisco sales people will not be compensated, implying volumes could be low."
The analysts said NetScaler's bigger market share will help Cisco. But F5's far more commanding share and Cisco's sketchy ADC history won't exactly guarantee returns.
"We do not anticipate material changes to the competitive landscape for F5, as the structure and timing of the partnership and initial channel checks suggest that Cisco's lackluster ADC history may cause resellers and sales reps to view the new solutions with caution," the Morgan Stanley analysts wrote. "We believe there is little risk to F5 as we expect it could take 6-9 months before Cisco's salesforce even begins to refer accounts to the NetScaler products."
The Cisco announcement is actually Citrix's second strategic alliance announced this month that has competitive implications for F5. Earlier in October, Citrix and Palo Alto Networks -- against which F5 markets as a security infrastructure vendor -- confirmed an agreement to jointly develop products and sync up on reference architectures and channel strategy.
PUBLISHED OCT. 19, 2012