Citrix Taps VARs, Microsoft to Beat VMware in Desktop Virtualization Market
SAN FRANCISCO: Citrix is looking to leverage its VARs and its relationship with Microsoft to cash in on one of the hottest emerging IT segments – desktop virtualization.
It’s a space that many VARs and CIOs are looking to as a potential money-saver as they look to reduce their administrative and management overhead at the same time they reduce the cost of upgrading their aging PC fleets.
No stranger to the channel, Citrix relies on its 8,200 partners for 85 percent of its annual revenues of more than $1.5 billion. The 21-year-old company is a small but well-established player in the virtualization and online services markets.
According to Gartner, less than 1 percent of PCs are deployed in a virtual or hosted environment but by 2013 – just three years – that number is expected to explode to 40 percent, representing a $65.7 billion dollar opportunity.
"I keep asking myself what’s missing," says IDC’s Steve White, Research Director, Software Alliances Leadership Council, and Channels. "Why isn’t it absolutely flying out the door? I like what these guys do. They have very good technology, they have an engaged partner group, it’s almost cultish."
And when you consider that the key message company management is delivering to its 1,200 partners at its annual channel event, Citrix Summit, is that Microsoft has embraced its virtualization technology and intends to marshal its forces to make this happen, it does sound too good to be true. Citrix executives say they’ve had a deep relationship with Microsoft for the last 20 years and they’re now poised for an even deeper and stronger relationship.
During his keynote, Al Monserrat, Senior VP, Global Sales & Services, called the expanded relationship with Microsoft a "game changer". Citrix has 20 years of success of working with Microsoft, over 215,000 joint customers, 1 million servers and 100 million users. While he admitted that the relationship had sometimes been adversarial, that’s changed over the last six weeks with Microsoft’s March 18th announcement that Citrix was its preferred VDI partner.
He told the partners that they can now do something they were never able to do before, engage with the Microsoft team.
"The energy is there, the enthusiasm is there," Monserrat says. "They want to work with you."
During his keynote presentation, Gartner analyst Mark Margevisius said PC virtualization has come of age and will be the most disruptive technology we will see through 2014. There are a number of factors driving this revolution, but a key one is the coming end of life of the Microsoft XP OS and a massive hardware refresh.
He says a lot of PCs were not refreshed because of the economy and the less-than-successful XP-successor, Vista, and there are now millions of devices between 5-7 years old. "These things will fail and many customers will move not because they want to, but because they have to."
That’s where desktop virtualization can play a big role, allowing this massive refresh to take place at a fraction of what it would cost to buy new PCs. He cautioned that virtualization is neither easy nor cheap, but Gartner figures the initial improvement in total cost of ownership would range between 2 and 12 percent, and eventually grow to 25 percent.
Tom Flink, VP Channels and Emerging Product Sales, tells Channel Insider he’s also responsible for managing the Microsoft relationship, so ensuring that partners will profit from this new relationship is front and center. As he noted during his keynote, "my job is to make sure that the end of the day you guys make money."
Now in his third year with Citrix, he started off his relationship in 1995 as a Citrix VAR, and his focus since coming aboard has been on improving partner profitability and productivity. He says he is building on the legacy established by one of his predecessors, Ross Brown, who he is now working with at Microsoft to ensure the new partnership succeeds.
He says both companies are in the process of building overlay teams, defining what are called joint wins, and how do they introduce partners into this. For the U.S. partners, this involves the CMVP program – Citrix Microsoft Virtualization Program – and the recruitment of net new partners, as well as both Microsoft’s and Citrix’ existing channel partners to sell across both companies product stacks.
"There’s one very common element between us, we have the same competitor in the marketplace (VMware). That element tends to drive a lot of alignment with the field teams… and also integration of products."
As part of the March 18th announcement, a VMware displacement initiative was launched, the VMware Rescue Program. It’s still early days, but Flink says the new relationship and program have driven a lot of engagement from customers. "People want to know about it. Microsoft is talking about it as well. It has opened the door into accounts that had thought they had already invested in that technology. So for Citrix and Microsoft (partners) that removes roadblocks."
The channel is essential to helping Citrix succeed in the desktop virtualization market, says Mick Hollison, VP, Desktop Marketing. During the last two quarters the company sold 1.5 million units, but they can’t and won’t be deployed without the channel’s involvement, he says.
There will be problems, he says, not least of which will be convincing IT departments. "It’s hard to underestimate the inertia of 15 to 20 years of doing something a certain way." The transition from a device with an OS to a service delivered seamlessly to the desktop – or user appliance – is the issue that must be dealt with.
"I think it will be hard for IT to get its head around. For users it won’t be a problem. Users are going to absolutely love it."
Formerly with Microsoft, Hollison thinks the new partnership will be a winner. "Microsoft actually discovered they can make more money with this model. They make great money with almost no sales or marketing effort on their part. This is good for their business."
Of course partnering with Microsoft has been characterized as getting into bed with a grizzly bear that can turn on you at any time. The IT industry is littered with the bodies of former Microsoft partners, agrees White. In fact, a former Microserf himself, he spent 7 years with the software giant working on the enterprise business and had no idea they had this deep relationship with Citrix existed.
"Microsoft has a very short attention span," he says. They never plan too far into the future, "and that’s one of their strengths because they react so quickly."
So White is optimistic about Citrix’ chances for the short term, especially with the most recent Microsoft developments. He believes Microsoft will do a very good job of marketing Citrix and both companies – and their channels – should make a lot of money.
"But for how long? I wouldn’t trust that relationship deeply. You have to be very careful because things can change very, very quickly."