Citrix Adding Cloud Virtualization

Dennis Byron

Maybe there is some more obvious reason (like a trade show I don't follow) to announce enterprise software the week before the Labor Day holiday. But conventional PR wisdom says it's the slowest readership week of the year except for that between Christmas and New Years Day. So perhaps Citrix's Xen division is announcing its Cloud Platform (XCP) on Monday in honor of the Red Hat Summit/JBoss World conference that is scheduled to kick off in Chicago on Tuesday. Conventional PR wisdom also says that announcing news right on top of a competitor is a great way to step on the other guy's story. And Red Hat/JBoss are sure to have some cloud and virtualization news to talk about this week.

Just to be completely accurate, is announcing XCP, and there is no Citrix Xen division. From an IT investment perspective, Citrix is one company segmenting only by geography and what it calls its Online Services segment. One might think of a cloud platform as an online service, but at Citrix, this term refers to the popular Go-To services such as Go-To Meeting.


Also because the XCP initiative is based on the open source Xen hypervisor, the news is more of a formality rather than a true announcement because the Xen community has had the news out there for a while. And speaking of terminology, note that this is news about an "initiative," not a product or service. All of which supports my "step on the other guy's story" theory.


But the news has some interesting aspects to watch from the IT staff/management point of view. To the extent that you use Citrix virtualization products, it's probably in relation to some Microsoft products where Citrix is a technology partner or product add-on. Citrix never says it is especially tied to the Microsoft ecosystem, but Citrix does say in its U.S. Securities and Exchange Commission filings that most of its revenue comes from application virtualization and that it runs the following risk vis a vis Microsoft:

In December 2004, we entered into a five-year technology collaboration and licensing agreement with Microsoft Corp., and in September 2007, we entered into a three-year source code license with Microsoft for the general release version of Windows Server 2008. These arrangements include a technology initiative for closer collaboration on terminal services functionality in future server operating systems, continued access to source code for key components of Microsoft's current server operating systems, and a patent cross-licensing agreement. There can be no assurances that our current licenses with Microsoft will be extended or renewed by Microsoft after their respective expirations. In addition, Microsoft could terminate the current licenses before the expiration of the term for breach or upon a change of control. The early termination or the failure to renew certain of our current licenses with Microsoft in a manner favorable to us could negatively impact the timing of our release of future Application Virtualization products and enhancements.

Which is what makes the partners of the XCP initiative especially interesting. They include HP, Intel, Novell and Oracle. That's a nice counterpoint to the Red Hat, Microsoft and IBM cloud efforts and it says to me, that in order to broaden its place in the market, Citrix will add cloud virtualization to the application, desktop, server and network virtualization already in its lineup.

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