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Microsoft’s expanded partnership with Citrix Systems to deliver a joint branch office box appliance, announced on Aug. 23, signals a brewing battle with longtime partner Cisco Systems.

The Citrix partnership, announced at the same time that Microsoft and new IP telephony partner Nortel Networks outlined more details in their alliance to deliver VOIP (voice-over-IP) software functions, pits Microsoft against Cisco in the branch office market, according to Joe Skorupa, research vice president at Gartner, in Fremont, Calif.

“The real subtext of this is that this is the beginning of Microsoft and Cisco walking out to the street for a real street fight. Microsoft is assembling a partnership portfolio of networking companies to help them go do battle with Cisco,” Skorupa said, referring to the partnership between Microsoft and Nortel.

“This is about who controls the branch environment, and the stakes are big. It is the real strategic battleground at this point,” he said.

Citrix claims, based on its own research, that some 55 percent of enterprise employees access applications from a remote office. And a third of total IT spending in large enterprises is in branch office infrastructure and the WANs linking those branch offices, according to Wes Wasson, vice president of application networking at Citrix, in San Jose, Calif.

A growing number of BOB (branch office box) appliances from a variety of vendors are allowing large enterprises to consolidate file and print servers, messaging servers, and other IT equipment from the branch into a central location, while still providing the performance required by remote users.

“The core issue at the branch is the lack of IT support,” Wasson said. “You can’t have something that cobbles five different pieces together. There is work going on to make it easy to manage [branch office IT resources] remotely,” he added.

The planned Microsoft/Citrix BOB appliance, to be based on Citrix’s WANScaler WAN optimization hardware, will incorporate Microsoft’s Windows Server 2003 Release 2 and ISA (Internet Security and Acceleration) Server.

The aims of the joint development are to speed application delivery across a wide-area link while making it more secure and to lower the cost of IT in remote branch offices, where IT support typically does not exist.

To read more about the Microsoft/Citrix deal, click here.

Microsoft brings to the appliance such functions as Web caching, security, remote management for patch distribution and remote server update management, as well as data replication in the two software offerings that will be a part of the appliance.

Citrix brings such WAN optimization and application acceleration techniques as adaptive TCP flow control, compression, CIFS (Common Internet File System) acceleration and service class policies. It also brings simplified configuration and operation through the WANScaler’s ability to dynamically tune itself as network variables change. WANScaler is based on a product acquired along with Orbital Data earlier in 2006.

As part of the multiyear agreement, Citrix can also bring other technologies to the appliance, such as the dynamic caching technology available in other Citrix WAN optimization appliances.

While the appliance will be Citrix-branded and sold through Citrix channel partners, Microsoft is committing significant marketing and R&D resources to the partnership, according to Wasson, and Microsoft will also work to educate its channel on the benefits of the appliance.

Additional products could also come out of the partnership. “Branch offices have all sorts of sizes. We’re looking at different form factors. The initial product is an appliance, but it would be straightforward to offer a software upgrade to an existing hardware server in the branch running Windows Server,” Wasson said.

But with the appliance not due to ship until the second half of 2007, the delivery of additional products is not likely until 2008 at the earliest.

In the meantime, Microsoft could choose to strike similar deals with Citrix competitors, since it is not an exclusive arrangement. “Microsoft has had discussions with other [WAN optimization controller] vendors, so Citrix may soon have rivals for Microsoft’s attention,” Skorupa said.

That could depend on how quickly Cisco moves to expand its line of application delivery products, which is not as broad as the Citrix line, he added.

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