A Citrix catharsis

It was not until last week that I finally decided to forgive and forget the past, and find out what Citrix is really up to these days.

For many of us in the on-demand sector, the name Citrix has long been a synonym for how not to do it. The Windows terminal technology that Citrix pioneered in the mid-1990s provided a relatively simple way of taking an existing Windows-based application and offering it as a hosted service. It was a great short-term fix, but unfortunately a lot of people mistook it for a long-term solution. They persuaded themselves that they were building the next generation of software — simply by taking the previous generation and putting Citrix in front of it. Of course what they actually delivered was the same old software, except with slower response times and higher costs. The Citrix-fueled ASP revolution was doomed to failure.

Five years later, the industry has moved on. There's a growing recognition that the right way to do on-demand is to build a multitenanted,Citrix Online is an on-demand giant, bigger than RightNow Technologies service-based architecture that takes advantage of client-based resources whenever they're available, primarily via browser-based technologies such as AJAX or Flex, and sometimes even extending to smart client techniques. The 'dumb client' Windows terminal approach is preserved only in enterprise environments where it's sometimes a cost-effective way of delivering legacy client-server applications to older PCs or hard-to-manage environments.

In the meantime, most of us in the on-demand world have shut Citrix out of our minds, perhaps with a little bitterness about those early failures that its name became so intertwined with. We've not really paid attention while the company has gradually adapted its business. For myself, it was not until last week that I finally decided to forgive and forget the past, and find out what Citrix is really up to these days. Much to my surprise, I found a company that has repositioned and expanded its product offerings to manage access to and delivery of all forms of applications, just as relevant for speeding an enterprise's AJAX applications as it is to serving legacy hosted apps.

It was even more of a revelation to meet with Brett Caine and Bernd Christiansen, respectively president and CTO of Citrix Online, the business unit that operates the 'GoTo' range of collaboration services — GoToMyPC, GoToAssist, GoToMeeting and GoToWebinar. Acquired as Expertcity in February 2004, the Citrix Online division is an on-demand giant in its own right, with trailing twelve month (TTM) revenues of $121.6 million to June 30th this year. That makes it even bigger than the number 2 on-demand CRM vendor RightNow Technologies, which reported a TTM of $99.3 million for the same period, and more than a third the size of web conferencing leader WebEx, with a TTM of $343.7 million (for comparison, on-demand poster child salesforce.com posted $396.6 million TTM with its latest results).

Citrix Online's target customers are small and mid-sized businesses and 'prosumers'. Its main offerings are its original GoToMyPC service, which allows roaming users to log in to their usual PC from a remote location, and the fast-growing web conferencing product GoToMeeting, which competes with WebEx, Windows Live Meeting and other similar services. A new addition is GoToWebinar, which launched recently and aims to make webinars more affordable for the SMB sector. The infrastructure that powers the business is a classic multi-tenant, shared services architecture — as far away as you can conceivably get from the traditional image of Citrix — and Caine and Christiansen are vigorous advocates of the on-demand model.

"Companies such as Citrix Online and salesforce.com and lots of others are starting to demonstrate in a very real way that companies of all sizes are able to use services to meet their needs in a cost-effective manner," Caine told me. "I think SMB has fully embraced the services model. There's no doubt about that. Companies of all sizes have started to seriously embrace the software-as-a-service model."

The evolution of Citrix is almost a microcosm of the learning process that so much of the industry has had to go through — moving beyond the Windows terminal model to embrace web-based solutions, both in its infrastructure offerings and in acquiring and expanding the Citrix Online range. It's ironic indeed that this almost accidental acquisition — originally suggested to Citrix by a customer on the company's advisory board — should have led to Citrix itself becoming one of the largest on-demand vendors around. It really shows how much has changed in the past five years.

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