Is Citrix's $500 Million Purchase of XenSource Paying Off?: Page 2

(Page 2 of 2)

Another advantage that comes with Xen is that it saves Citrix the trouble of developing its own hypervisor – something that VMware has poured a good deal of R&D money into.

Even so, the trick with any open-source business plan is finding a way to add value to the core project – value that people will actually pay for.

“Clearly, Citrix has added the most value to Xen,” Babineau said. “However, as Xen matures, it gets harder and harder to keep adding value.”

Citrix seems to have thought this problem through, giving away XenServer early on and shifting their focus to management capabilities. The other thing to consider with XenServer is that the free platform becomes the beachhead for emerging virtualization efforts, such as virtual desktops and cloud computing.

The Next Big Test: Virtual Desktop Infrastructure

In the nascent virtual desktop market, Citrix is already doing well.

According to the Burton Group, Citrix and VMware have a nearly equal share in the VDI (Virtual Desktop Infrastructure) market. Gartner predicts that this market will take off soon, growing from $1.3 billion this year to $65.7 billion in 2013.

To put those numbers in perspective, this year VDI will make up less than 1% of the professional PC market, while by 2013 Gartner believes VDI will represent more than 40% of the market.

The server market, on the other hand, is still owned by VMware. IDC pegs VMware’s market share at 78%, although with anywhere from 80-90% of the world’s servers left to virtualize, there are still plenty of servers out there to fight over.

“XenSource is critical for Citrix in the VDI and cloud-computing markets,” Babineau said.

He sees only three major players competing in the VDI market: VMware, Citrix and Microsoft.

“I think Citrix will play a bigger role here than most people think. Success in this space could even force Microsoft and Citrix to rethink their whole co-opetition angle.”

According to Wolf of the Burton Group, the XenSource acquisition means that the VDI market is Citrix’s to lose.

“Citrix has a good core architecture, and the driving factor of VDI adoption, the cost and complexity of managing desktops, isn’t going to disappear,” he said. “This type of challenge plays to their strengths.”

Another emerging virtualization battleground is cloud computing. “In a cloud environment, you need server virtualization as a necessary first step,” Babineau said. “You can look at VDI as another critical step toward real-world cloud computing. It’s an emerging battleground for vendors.”

Of course, owning either of those early steps certainly helps position a player for the later ones. Citrix plays up the fact that the few existing cloud architectures out there, such as Amazon EC2, are based on Xen, making integration with Citrix’ own Xen-based offerings an easier task.

Even so, Citrix won’t just be competing with VMware in this space. Microsoft, Cisco, IBM and others plan to play here.

Last month, Gartner predicted that cloud services revenue will jump to more than $56 billion this year, growing to more than $150 billion in 2013.

In a down economy, competition for anything actually generating revenue should be fierce. Citrix is well positioned, but they’ll be up against giants.


Page 2 of 2

Previous Page
1 2
 



Tags: Microsoft, virtualization, Citrix, VMware, XenSource


0 Comments (click to add your comment)
Comment and Contribute

 


(Maximum characters: 1200). You have characters left.