Citrix: What kind of company is it anyway?

CEO explains how Citrix's mobile, cloud and social pieces fit together

Citrix is many different things to many people. It's a cloud company, it's a virtualization player, it's a mobile technologies vendor and it's a collaboration products provider. But according to Mark Templeton, Citrix CEO since 2001, all of that blends together and fits with where enterprise IT shops are headed. Here, speaking with IDG Enterprise Chief Content Officer John Gallant, Templeton dishes on Citrix's overall strategy, its relationships with Cisco, Microsoft and Apple, its rivalry with VMware, and its controversial take on open source cloud computing.

Mark Templeton

Mark Templeton

Citrix (CTXS: NASDAQ) is many different things to many people. It's a cloud company, it's a virtualization player, it's a mobile technologies vendor and it's a collaboration products provider. But according to Mark Templeton, Citrix CEO since 2001, all of that blends together and fits with where enterprise IT shops are headed. Here, speaking with IDG Enterprise Chief Content Officer John Gallant, Templeton dishes on Citrix's overall strategy, its relationships with Cisco, Microsoft and Apple, its rivalry with VMware, and its controversial take on open source cloud computing. (Read more IDG Enterprise CEO Interview Series interviews here with the biggest names in IT.)

You guys are in a number of different product areas. You've got hypervisors, GoToMeeting, cloud-related products, desktop virtualization, a slew of things. I think sometimes people may get confused as to what kind of company Citrix is. Fill in the blank: Citrix is a ____ company?

Citrix is the company that enables mobile work styles and powers cloud services that deliver them.

Let's drill into that. Talk about what that means for a customer and how you deliver on that promise.

Most of enterprise computing is focused on where people work and accomplish the mission of business in a productive, flexible, empowered way. We tend to start with that end of our conversation because everything is directed at driving mobile in terms of work styles, whether that means mobile across devices, locations, applications, data or a wide variety of situations that most individuals and enterprises face every day. That means a few things to us. To be able to seamlessly and easily collaborate with anyone from anywhere.

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So when we think about our portfolio in collaboration, it really is being able to work across firewalls with high-definition video, VoIP, screen sharing and document sharing, so that people can work anywhere and work on the kinds of things that make them more productive and create the value to the business mission they're on. Next is our work in the data sharing area, which is particularly important these days as people have more devices. In the U.S., we see the trend going up and I think this year in research we've seen an average worker on a daily basis will use 2.3 different devices in a business context. Having applications, as well as data, available across them is critically important. Just behind that is the ability to then unify and aggregate all the services and capabilities that people need to work anywhere as a service that IT provides. Behind the curtain, at the back end, are all of our technologies that enable Windows apps and desktops to be an on-demand cloud service. And then behind that would be the platform that allows you to build the next-generation cloud infrastructure, Amazon-style, to then power not only traditional apps that you deploy, but the new style apps that you're building that are by definition probably mobile first and then Web second.

Mark, let's talk about the competitive set, because you play across a lot of different landscapes and pieces of the market. Who do you see as the core competitors?

In the collaboration end of our business, we compete on a day-to-day basis with a wide array of companies from Box to WebEx to LogMeIn. Then as you go up the stack in the collaboration area, we'll intersect with the bottom end of unified communications, which is a space where we do not compete. In the enterprise mobility and Windows-as-a-service space, our primary competitor is probably VMware with their aspirations in desktop virtualization. And then there is a range of smaller companies providing products and services in the mobile device management, mobile application management and Windows virtualization area. In cloud networking our primary competitor is F5, and we compete with them on a daily basis where we have great strength in the dot-com/e-comm world. The largest dot-coms/e-comms in the world run on our NetScaler cloud networking infrastructure. Where F5 has their prominence is in the telco space, which is a newer space for us to enter and attack. In the cloud platforms part of our business, where you see customers building Amazon-style clouds, our competitor is VMware primarily, where they are trying to transition their enterprise customer base to more of a cloud-style infrastructure. And then the rest of the competition would be around the open source community, which is really our vector of attack in cloud platforms too, being a very active member of the CloudStack community and leveraging that technology in a product we call CloudPlatform. 

So you can see, we are taking an end-to-end approach. You can start with a cloud platform, add our cloud networking, and add our Windows-as-a-service and Windows virtualization technologies on top. You can then plug it all into our enterprise mobility solution and then can deliver the full array of mobile work style capabilities around apps and data and communications across people.

One of the challenges, it seems to me, Mark, is that you're selling to lots of different people within the IT organization because of the range of things that you offer. What steps are you taking to make sure that the IT organization really understands that end-to-end strategy and the value of all the things that you bring to the table?

We've spent an increasing amount of time with CIOs and IT leadership teams in the last 12 months. And we do that through various vehicles, including the conference center we opened up about 15 months ago in Santa Clara, where this year we'll have 500 large-scale IT organizations come through as they see their strategic vendors that are based in Silicon Valley. We have a strategic infrastructure conversation with them, where we're connecting our product and services to the kind of business value realization that they are actually looking for. And then those things are complemented by the conversations that we have with IT organizations and line-of-business organizations more from the bottom up. 

So for example, GoToMeeting is not an IT purchase. I believe IT organizations should provide this kind of service on a broad basis, but it is not an IT purchase typically. It's a purchase by a line-of-business leader or executive or a small-business owner. The same will go for some of our other SaaS products. And then when you look at who we engage with on cloud networking, cloud platforms, that will tend to be the head of infrastructure, the head of networking, it will be someone doing the same thing for a service provider. So those are different types of bottom-up conversations that we also work on a consistent basis, both directly and through a pretty wide array of partners.

I want to talk specifically about cloud for a minute. In a presentation that you made earlier this year you said IT is moving beyond a cottage industry into the industrial revolution because of cloud. What do you mean by that?

We're moving from an era where every data center is custom designed, from the metal up, even though so many of them share the same types of applications and workloads that they want to deliver. So the industry is moving -- is necessarily led -- by what everyone's seen with Amazon and their infrastructure-as-a-service offering. You can offer a standard platform for manufacturing apps without having control over the design of the underlying machine, and it's just that most IT organizations haven't been built this way. They've been built from the bottom up in a custom way, whether it's the mix of hardware, the mix of operating systems, the mix of support and management tools. So people who are actually building the things that have value, the apps, if you will, they have total access to the underlying platform, which drives an incrementalism around customization that is turning out to be not only unsustainable from an economic point of view, it's not driving scale, repeatability and the agility that most organizations need. 

And that's basically what happened in the industrial revolution. You have a cottage industry that makes, let's say, shirts, where they hand-sew and they all have their own design. Yet they all produce a shirt that someone wears to protect them from the cold, but they're all unique and they all reflect the wheel being reinvented over and over again. So in that era, in the cottage industry era, you get lots of unique customized things, but you don't get mass scale and mass production and the cost economies, and you're not able to move the innovation up the stack. When we talk about that, you take people out of the factory and you put them in distribution and in retail and in meeting the customer, where there's more value and more intimacy to drive growth and business. I think that's what's happening to our industry and to IT organizations all at the same time.

You've also said that the future for IT is about owning and aggregating services. Can you explain that concept and what you think it means for the IT organization?

Yes. It really is sort of additional commentary on top of what I just said. And that is if you step back and take Apple, kind of how they design and build things and where they [derive] value, they are a great lesson. First of all, when you pick up, let's say, an iPad package and you look at the print on the back it will say: designed in California, manufactured in China. What Apple has decided is that the value is in the design and that design is about empowering people and being very valuable to the person who actually pays for the product. And that when it comes to manufacturing, it is something that is managed through a supply chain process, where they're looking for flexibility across lots of suppliers, so they always get the best mix based upon cost, delivery, economics, etc. And they are an aggregator of manufacturers, where the value is in distribution, retail and intimacy with the customer and value to the customer that's going to actually pay for the device. That's the vertical integration that they've done so well. Then they've also done horizontal integration so well, integrating at one end the user experience with content at the other end. And they are an aggregator of content, to provide a beautiful and valuable user experience using the beautifully vertically integrated devices that they've designed.

For IT, there's a huge lesson there about aggregating content, whether it's movies and music, podcasts, TV shows, or it's an array of application services, data type services or infrastructure type services, and being able to aggregate those and then distribute and retail them and create the kinds of mobile experiences that end users need or infrastructure services that DevOps-type people in an organization need. The focus going on aggregation and less on actually building the custom infrastructure to manufacture the content, I think it's a huge mind shift for IT organizations.

Makes sense. Mark, can you talk about Project Avalon, what is it and what you aim to achieve with it?

Yes. What we aim to achieve is to allow our customers to move from more of a handcrafted way of building desktop virtualization solutions to a Windows-as-a-cloud-service, where they're building on top of a cloud orchestration platform, against a set of very simple blueprints. And they are operating with the kinds of tools that allow them to focus on distribution and retail and where the demand is and not on the operational aspects of running systems like this. Project Avalon is kind of prima facie behavior on our part based upon our beliefs around where the value is for IT organizations and it's less around the competency of running and more around the competency of distribution and delivering the business value.

So if I have a large number of Windows users in my environment, I'll be able to do what for them?

You'll enable departmental and individuals to self-provision apps and desktops that are running better virtually, which is highly valuable in a highly mobile and dispersed organization.

What is the status of the project?

We just delivered the first tech preview on Nov. 1, and there will be a second tech preview early next year.

I want to talk to you about your partnership with Microsoft, but specific to this, is this something that synchronizes well with Microsoft's cloud strategy?

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