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Live Fast – Die Young

Last week, I was offered the proposition that Citrix, like Novell, would ultimately fall by the wayside, another victim of Microsoft’s well-worn strategy of innovation through inclusion.

White Shark & Remora Fish

Novell is of course still very much with us and its foray into Open Source computing may yet see it rise, once again, like a Phoenix from the ashes of its once powerful Netware Empire. Novell, in the late eighties and early nineties, suffered from appalling hubris, failing to take Microsoft intentions in the networking space seriously and then dithering over its product strategy while its Enterprise customers were lured towards the promise of a better life with Windows NT.

Citrix is a little different because it’s always been like a Remora fish attached to the surface of a rather large and hungry Great White Shark called Microsoft. Its MetaFrame software leverages the application architecture of the giant, which underpins every Citrix installation and Citrix has done rather well as a consequence.

It was Citrix that arguably defined the early shape of thin-client computing at a time when the concept was being torn between competing interests and agendas, involving Microsoft, Sun Microsystems, Oracle and Microsoft. Today, its MetaFrame software is the most popular method of offering users access to Microsoft’s “line-of-business” applications via server-based computing and Terminal Server technologies. Meanwhile, the IT industry is in the process of yet another sea-change with the arrival of new XML-based solutions in hand with Microsoft’s own .NET application strategy, which is beginning to show promise. As a result, some observers are beginning to question how the future will treat Citrix and its MetaFrame product line; wired as it is into the backbone of a largely Microsoft environment.

As the software industry moves back towards it roots in, using the Internet as distributed network environment, the demand for products like Citrix or Terminal Server must inevitably decline over time in a .NET connected world but until then, the demand to access legacy application with thin-client technology is likely to remain strong.

Forrester Research expects the Server-based computing market to continue growing for the next two to three years as enterprises expand existing deployments. “Citrix”, it says, “had a 78% market share in 2003, but this will decline to 71% by the end of 2005, as small and medium-business customers increasingly deploy Microsoft Terminal Server without MetaFrame or other third-party products.” Forrester may be over optimistic in its market share assessment if Citrix customers move more rapidly than expected to a complete Windows Server 2003 solution to save money.

Can Citrix innovate fast enough to stay ahead of Microsoft, which is steadily building Citrix-like functionality in Windows and how will MetaFrame fit into a .NET world, where Microsoft’s own .NET applications may offer many of the features that make Citrix attractive?

Where Citrix remains strong is in offering cross-platform and multiple-device connectivity in a world where the Windows environment is no longer the only game in town and UNIX-based solutions and systems may increasingly find their way into a corporate portfolio once completely dominated by Microsoft. Whether this nascent market can evolve quickly enough and in sufficient volume to balance potential competition with Microsoft in the Windows space is a question that still hadn’t been satisfactorily answered.

At present, Microsoft Terminal Services allows existing 32-bit Windows applications to be accessed via remote devices and Microsoft’s own “evolutionary” push in Windows Server 2003 means that, RDP 5.2 and Terminal Services 2003 provide many of the features that used to be only available to customers via more expensive third-party tools. As an example, Citrix MetaFrame still extends and adds to Terminal Services’ capabilities and such third party tools as this, still offer features, such as application publishing, seamless windows, anonymous user support, and non-Microsoft client access, all of which suggest that while more cost-effective for the customer than ever before, Terminal Server 2003’s features are “evolutionary, not revolutionary”, an observation which is unlikely to bother Microsoft as it swims towards a .NET future, prompting the comment that “ Citrix MetaFrame is a solution that provides ubiquitous access to legacy applications, whereas Microsoft .NET is a solution that provides ubiquitous access to future applications. “

So Citrix hasn’t quite slipped into Novell’s slippers yet but its future may have to balance short-term optimism against a pessimistic worry that the Microsoft will continue to evolve Terminal Server’s features at its expense, threatening Citrix’s flagship ICA protocol, forcing the company to innovate ahead of Microsoft in the .NET space.

I’ve speculated in the past, that Citrix is starting to feel the squeeze with the arrival of Windows Server 2003,with load balancing features from Microsoft that are capable of supporting many thousand of users. For many customers, this eliminates their dependence on Citrix licenses outside the need for the more sophisticated and arguably expensive, third-party tools mentioned earlier. Microsoft is rarely prepared to see potential licensing opportunities leaking from its own environment when it can innovate so well in every new iteration of the Windows Server on the one hand and deploy .Net on the other. So Citrix management may be reminded of the expression, “Live fast – Die Young” and in letting go its hold on the Great White Shark will have to somehow avoid being eaten by it.


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