Home Applications Microsoft to Buy Citrix – Announcement Coming Friday or Monday???

Microsoft to Buy Citrix – Announcement Coming Friday or Monday???

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A few months ago I wrote an article detailing how Citrix CEO’s decision to buy XenSource was one of the greatest moves in IT history.  In that article I also threw out a teaser stating that I thought Microsoft would announce they would buy Citrix a day or two before VMware’s VMworld conference.  Well, it is a few days before VMworld and I must admit I was starting to think I would have to write that there would be no deal and to eat a bit of crow, but today my inbox lit up with rumors.   I even heard the rumor on my favorite podcast, Tech 5 with John C.  Dvorak.   (Dvorak has been doing IT news for over 30 years, this guy does not report on silly rumors)

This being said, why do I believe this might be true and what are the rumors telling me?

  • Citrix got rid of all their distributors expect for one, Ingram Micro –    Did Citrix make this move to set themselves up better for the Microsoft purchase?
  • Citrix stopped spending money on advertising and marketing – Just over six months ago, when I first started hearing the rumors, Citrix was spending money like crazy on ads and marketing events but one day all that money dried up.  Why?  Is this because they were in the process of selling the company and they wanted to make the bottom line look as good as possible?  Or was it because they were trying to make their numbers due to the fact that XenServer sales were just NOT THERE?
  • About the time Citrix stopped spending money on marketing they also closed up all their open job recs.  One day Citrix was hiring like mad and the next day all the jobs were gone.  Why?  Does it have to do with making sure they make their numbers or does it have to do with not needing a slew of new employees while they were working on selling the company? 
  • This one is new. I was told that last week Citrix laid off 20-30 people.   All of the people laid off held business relationship jobs and I heard most of the IBM relationship team was let go.   Why is this?   Is it because Microsoft does not need them?   Lord knows, Microsoft and IBM are not fans and I would guess Citrix would not need an IBM relationship team if they were purchased by Microsoft.   
  • Microsoft has cash and lots of it and is committed to spending it…    If Microsoft can’t beat Google then maybe they want to make sure they are number one in the virtualization market.  If so, buying Citrix would be better than partnering with them and would definitely help in taking on VMware.   Maybe so but maybe not??
  • Microsoft is calling Citrix’s XenDesktop solution their own, "Microsoft VDI".   Last time I saw this, a company of amazing people with a great product called Softricity was picked up for 270 million!!  Microsoft is just not in the business of leaving money on the table.  This way they will with Citrix by giving Citrix the VDI market.
  • VMware – – It is well known that Microsoft needs Citrix to compete against VMware.  Microsoft believes the future of virtualization is not in the hypervisor but in the management of the virtualization environment and Citrix brings a lot of experience to the table on how to manage remote applications and services.  Due to the XenSource acquisition, Citrix brings to the table a great team that can help pull this off. 
  • This might be the most important reason and that is that companies like HP, IBM, and Cisco have been rumored to have been looking at buying Citrix and Microsoft would never let anyone else own their closest and best partner.   I believe this is the true reason behind this rumored acquisition.  Simply put, Microsoft has no choice…    They can’t do it alone and they can’t afford to lose Citrix to an HP or Cisco where they can’t tell Citrix what to do.  We can all agree that Citrix, for the past ten plus years, has done anything and everything Microsoft wanted.  Would this be the same if Citrix was owned by IBM, HP or Cisco?  The answer is NO, and this is the biggest reason Microsoft would acquire Citrix.

Well, those are my reasons.  I said it publicly on June 5th and now I’m saying it again.  In many ways I hope I’m wrong so if you don’t mind, let me explain why I hope this does NOT happen.

  • Citrix channel – I first found Citrix around 1996 when I worked for a consulting company.  Over the next twelve years I was lucky enough to work for both a Channel Partner and Citrix as a Channel Systems Engineer and in that time I’ve learned that the true reason for Citrix’s growth was not because of  great products or great management, but because of their channel partners and their love for Citrix.  The simple fact is that Citrix has done a great job sharing the profits with the channel and much more.  The channel loves Citrix and in a recent interview with one of Citrix’s and VMware’s biggest partners they told me that "When Citrix comes out with a new product we bend over backwards to sell it and we will do anything possible to make it a success".   This was and is huge for Citrix.

Will Microsoft treat the channel the same way?  My answer to this question has to be no.  I’m not saying Microsoft treats their channel poorly, just that Citrix did a really great job with it.  I’m also a person who loves to look back through history to tell me the future.   I just need to look back at the Softricity acquisition a few years ago to see how it affected the Softricity channel.   It was not good.  In fact there is no longer a Softricity channel… But, there sure are a lot more App-V (Softricity SoftGrid) engineers out there, so if you’re a channel partner this might not be good for you but if you’re an engineer, don’t stop your Citrix training anytime soon…

  • Distributors – Oh yeah, Citrix has already done everything they can do to destroy the US distributor model but there is still the rest of the world that does software distribution correct by adding a huge value-add vs. just software procurement.   As with the Softricity buy, the Citrix distributors might just end up selling something else as they sure are not selling Softricity anymore..    
  • Customers – This is the one that might be interesting.  If we look at what happened to SoftGrid we see that Microsoft sold more SoftGrid licenses in a year than Softricity sold in its lifetime but that the product itself is just NOW being upgraded two years later.  That being said, can we expect Citrix products to take longer to come to market?  Can we expect XenServer and others to continue?  Yes on the XenServer as Microsoft wants a bare meta, Linux based, hypervisor to compete with VMware for customers that just will not use a Windows based hypervisor.  Not to mention that it would be very bad PR for Microsoft to table an open-source solution as it would play in to the hands of all those open-source bigots out there that hate Microsoft.   Although to keep XenServer and the XEN hypervisor around would be a very good thing for Microsoft as it gives more alternatives to VMware ESX.

Last but not least I have to ask myself will this open up a space for companies like Ericom and Provision Networks as an alternative to Microsoft?  I have to believe that those people who "hate" Microsoft, for whatever out of control reason, will use a non Citrix (Microsoft) solution to provide access to the Windows based applications they need.  Not to mention that it would be interesting to see how the open-source world thinks about the XEN hypervisor being owned (sponsored) by Microsoft….  Heck, Red Hat your 107 million acquisition of Qumranet might be an even better buy than you imagined.

The bottom line is simple, I went on a limb and said it would happen, I thought I might have spoken too soon but we only need to wait a few more days, at tops, to find out and even then it might still happen.   We will have to wait and see… I will be happy to eat crow as I love being wrong on this one… 😉

(p.s. or the bottom line is that Citrix is losing their shirts and all the cut backs and layoffs are due to little to no XenServer sales and declining XenApp sales…. But that is a topic or another article…)

 

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DABCC.com by Douglas A. Brown Douglas Brown, DABCC Founder and President, CTP, Microsoft MVP, and VMware vExpert, has more than 17 years of experience in virtualization, cloud, and server based computing. Prior to DABCC, Doug worked at Citrix as a Senior Systems Engineer where he developed the leading Citrix deployment system, “Methodology in a Box,” which has more than a million users. Doug is a notable industry speaker and has also been an accomplished author for the past 17 years. Douglas Brown, DABCC Founder and President, CTP, Microsoft MVP, and VMware vExpert, has more than 17 years of experience in virtualization, cloud, and server based computing. Prior to DABCC, Doug worked at Citrix as a Senior Systems Engineer where he developed the leading Citrix deployment system, “Methodology in a Box,” which has more than a million users. Doug is a notable industry speaker and has also been an accomplished author for the past 17 years.
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