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Citrix rides virtualization into 2009

Nonexistent machines cut costs

Counting Clouds

No one seems to know for sure how many clouds, whether internal or public, that have been built, but Roussain estimates that there are fewer than 100 real clouds, meaning infrastructure that has utility-style pricing and an easy-on-and-off access.

Citrix' plans for using virtualization as a lever to open the corporate checkbooks is not just limited to traditional server workloads. The company has its eyes on all of those corporate desktops out there, hundreds of millions of PCs and laptops that are generally in a three-year replacement cycle and are generally running Windows. A chunk of those machines are coming up for replacement at exactly the time when companies want to lower management costs and not spend any more dough on new hardware if they don't have to.

For a long time, a virtual desktop was using Citrix' Presentation Server or Microsoft's Remote Data Protocol to run applications on a server instead of on the desktop. But Citrix, VMware, ClearCube, Novell, and a bunch of other companies are delivering a new kind of virtual desktop, where a whole system image is hosted back on a server with end users accessing it from a thin client or even an old PC that ends up acting like a thin client. (This is different from using a hypervisor to run multiple operating systems on your PC, which is also a virtual desktop).

Roussain says that there are many thousands of companies using Presentation Server, but only several hundred using XenDesktop, the Xen-derived virtual desktop infrastructure. As best as Citrix can figure, if you lump all of these different techniques together, there are maybe 10 million virtualized desktops (and this is a loose definition of virtualized, to be sure). The vast majority of these desktops are using Xen App, Presentation Server, or one of their predecessors or offshoots. Which is good news for Citrix, since it has access to a large number of customer accounts.

Roussain estimates that there are probably only 500,000 true virtual PCs (meaning PC images running from servers over the network) at the corporations of the world, and he hedges and says perhaps the number is as high as 1 million. This is a fraction of a per cent of the installed corporate PC base.

But Citrix is optimistic that, despite years of other vendors taking a run at this idea. "I think you will see this take off in 2009 and into 2010," says Roussain.

To that end, Citrix is putting together an update for its App Receiver application virtualization software, which allows end users to access applications streamed from corporate servers in a secure way. This security is important because of another growing trend on PCs: letting end users support their own gear or run corporate applications on their own machines. Citrix has a program called Bring Your Own Computer that gives employees a $2,200 stipend to buy a new PC or laptop if they agree to do the tech support on it.

Citrix says that it is about 20 per cent cheaper to have an end user maintain their own laptop than have the IT department do it. And let's face it: You end up supporting yourself these days most of the time anyway. Citrix wants a fifth of its laptop users under the BYOC program by the end of 2009 to help cut its own IT costs.

"2009 is not going to be just about virtualizing servers, but also virtualizing desktops and applications," says Roussain. "This technology will be pervasive, and for Citrix, the key is coming up with an end-to-end virtualization strategy." That means one copy of each application and its underlying software stack, deployed to a desktop or server, run in a virtual mode. It means one user name and password for everything and once instance of the data driving it all.

Hence Citrix paid a 50-to-1 multiple on revenues back in August 2007 to get its hands on XenSource - not for the open source hypervisor, but for the smarts behind it. Still, it is hard to imagine that the Xen products have come even close to paying for themselves yet. Citrix took the long view when it acquired XenSource and will have to continue to do that to get its bait back in this economic downturn. It really doesn't have a choice. ®

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