Elliott Management has a plan for Citrix. Shake out sales and marketing, sell GoTo and NetScaler, dump the dead wood, and shut down all blue-sky research.
The rest is a quick tour or other ideas for what you’d do with Citrix, other than leaving it alone.
Citrix has a new DaaS service provider survey out. I’m often overly harsh on virtual desktops and, by extension, DaaS. I’m always curious who actually uses this stuff, so the vertical breakout is interesting:
The largest number of service providers who responded listed financial services, healthcare and manufacturing as the vertical markets they served. This is an interesting change in the vertical market ranking compared to the December 2011 Citrix Service Provider survey. In 2011, service providers indicated their leading verticals were healthcare, legal and public sector/government. Manufacturing finished fifth in the 2011 survey ranking of most popular verticals and third in the 2014 survey. The growth of manufacturing as a DaaS vertical is a keen indicator of new trends in the vertical market ranking, which is usually dominated by healthcare and financial services.
Citrix has, of course, chosen to not sell DaaS directly but rather be a supplier for others who’d like sell DaaS. They seem to be doing well according to what they reported to us for a recent 451 report: 50% y/y growth from service providers. Amazon and VMware, and others, have gone the opposite route. We’ll see what happens.
One of our new, excellent analysts Scott Ottaway and I wrote up a report on Citrix’s Workspace as a Service portfolio and strategy.
Clients can read the full report, but here’s the 451 take:
Citrix reported impressive double-digit revenue growth and total licenses from its cloud service provider channel. Citrix also launched multiple new technologies – XenApp, XenMobile, ShareFile – as well as announced a cloud-managed Workspace Services option that service providers or enterprises can leverage to optimize, automate and more easily manage WaaS infrastructure and users while still maintaining the end-user relationship. Unlike VMware, Amazon Web Services or Microsoft Azure, Citrix will not directly compete with its WaaS service provider channel by offering end-to-end WaaS.
While the WaaS market continues to grow rapidly and Citrix continues to offer multiple new technologies and services, service providers need to carefully evaluate the margin opportunity and operational costs versus end-user demand and willingness to pay for the new technologies such as mobile-optimized applications and cloud storage. With the entrance of global cloud providers into the WaaS market within the last six months and the potential for commodification of workspace pricing over time, 451 Research believes that service providers need to carefully evaluate the market and margin opportunity of new expanded WaaS capabilities and to not overprovision for low-opportunity use cases or to reduce margin opportunity by competing solely on price per workspace.
If you’re not already a client, sign up for a free trial and mention that I sent you.
I spoke with a couple of reporters earlier this week on the partnerships between Google and VMware and Google and Citrix around supporting Windows XP on Chromebooks. VMware has $200 off Chromebook discount for business buyers, and Citrix has a discount as well. Both are deep into vying with each other around the Desktop-as-a-Service market and interested in dominating that market which is looking to be driven by a pretty simple need: providing a way to use Windows applications on non-Windows devices.
The role of Chromebooks in all of this is interesting: perhaps it’s the cheapest “non-Windows end-user device.” It hasn’t seen massive market-share, but has been growing quickly to something like 2-5%, to throw out a wild-guess driven broad range. (ABI and NPD have some recent Chromebook marketshare estimates as well.)
Amazon launched a DaaS offering recently as well, which I covered in a 451 report; VMware released their DaaS just a tad before Amazon; Citrix, of course, sells a DaaS platform to others who want to run it, and of course has its current virtual desktop empire.
Back to the press part! Both Kevin McLaughlin of CRN (his story) and Dan Kobialka of Talkin’ Cloud (his story) asked for my take on the VMware/Google partnership, and then on Citrix’s involvement. Here’s the amalgamation of my responses to them:
Last I saw somewhere in Twitter there’s something like a quarter of the market still running XP which is certainly significant. I’m not really sure how many customers would take advantage of switching over to DaaS: the time and expense to do so might be the same as just upgrading to Windows 7 depending on how grueling the process was.
When I look at VMware and Citrix (just announced) working with Chromebooks the impact is mostly about adding legitimacy to Chromebooks as a viable business tool. VMware’s partnership means that there’s one way to keep using Windows applications on Chromebooks, through Horizon via the Blast protocol. Citrix announced a similar partnership today as well. Both have a constellation of service provider partners who do Desktop-as-a-Service (VMware has it’s own DaaS as well), or enterprises could just use their own on-premise virtual desktop setups, which both vendors support as well.
I’m not sure how many Windows applications are out there, but there’s likely an uncountable amount ranging from older packaged software to custom written applications used inside the confines of corporate firewalls. Rewriting all of these applications to be pure HTML or native iOS and Android is sort of ludicrous at this point, so as things like BYOD and the spread of iOS and Android devices in the enterprise plays out, companies will need some way of accessing these Windows apps. Android and iOS have had the kind of virtual desktop support needed for awhile, and the Chromebook work that VMware and Citrix are doing here is making it so that Chromebooks can fit, technologically at least, into that corporate mix as well.