Citrix Rides A Wave Of Virtualization Success

It's shaping up to be a critical summer for Citrix Systems, the 26-year-old company that has reinvented itself at least twice, suffered at least two near-death experiences and now sees untold opportunity before it. The Fort Lauderdale, Fla.-based company, which built its business on solutions that help extend the Windows server platform, is riding a wave of virtualization success that's building throughout the IT industry. Citrix is doing so well now that rumors have begun to pop up that the likes of an IBM or a Cisco Systems may be about to make a move and acquire the company. (Citrix executives, for their part, won't even talk about such speculation.)

"Channel metrics are solid, early customer wins are beginning and we are on track," Citrix CEO Mark Templeton told financial analysts in April, talking about his company's earnings and future plans. Citrix is pushing its virtualization solutions harder than ever. With the just-released XenDesktop beta, the imminent release of the revamped XenApp, new partnerships with computer makers Hewlett-Packard and Dell, Templeton may be holding a strong hand of cards.

But the very solution providers Citrix needs to recruit to compete with powerhouses like Microsoft and VMware say the company has very specific and necessary tasks to accomplish to win them over. Some of those are in Citrix's control, others, however, may not be.

Many of the more than 5,500 Citrix VARs appear to be solidly behind their vendor partner.

"I think Citrix has been very strong in terms of working with the channel and keeping the channel going," said Myron Bari, president and CEO of IPM, a New York-based Citrix Platinum partner. "We're both learning from each other. The most important thing is that it's always been a channel company. If they continue, I think the resellers of the world will migrate to it."

Those other VARs that Citrix wants to recruit for its mission may not be as convinced that the vendor has both the needed technology and channel commitment to put it all together.

"Two things hold us back" from partnering with Citrix, said Ken Smith, president of Software Technology Concepts, Erie, Pa. "One: The guts of my (customers') businesses revolve around ERP software. And they use the VMware platform in a lot of cases for what they are doing. The Microsoft virtual machine is now going to be part of the (Server 2008) operating system, so that makes it a big challenge."

To overcome the obstacle of stiff competition, Smith said, Citrix needs to hit a home run on the second task: Bring to market game-changing technology. "Unless they come up with a paradigm shift, it's going to be tough for us to align with them as vendors," Smith said.

Citrix executives, though, exude confidence that they are doing exactly that. So the CRN Test Center decided to examine some of the new Citrix technology up close. What we found is some real promise, but also potential pitfalls.

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