Citrix CEO: We're at the front of the grid

Speaking at the Citrix iForum conference in Florida recently, Citrix CEO Mark Templeton told ZDNet UK that, having specialised in tools to allow applications to be streamed from the server to multiple clients since 1989, his company is ideally positioned to ride the current wave of hype from vendors such as Sun, HP and IBM around utility and grid computing.

Is Citrix simply another IT vendor jumping on the utility or grid computing bandwagon or do you really have something concrete to offer customers in this area?
I think that we have the chassis and underpinning framework for that bandwagon. We have been doing this for years and I can prove it to you. Do you remember ASPs (application service providers)? Do you remember who led the charge on that? It was Citrix. We founded the industry consortium and the only ASP activities that have been able to survive and prove that it works are some of those that adopted our technology as a core to providing it.

ASPs didn't build application software, they didn't build desktop operating systems or desktop software. Their whole value was providing access between the two and managing all of it. We have been working this for years, it has just taken the rest of the world a long time to catch up. Now it is sort of new all over again and there is a better opportunity to make it work this time.

You claim to have a lot of experience of this market but how do you deal with competition from Microsoft with its Terminal Server product?
We don't see Microsoft as a competitor and I don't think Microsoft sees Citrix as a competitor, but engineers -- who are all about innovation -- do compete with each other, and that is OK. Microsoft has a very horizontal and Windows-centric view of the world. That is their whole mission and we applaud that, but our view is different. Our view is heterogeneous -- it is all about access and the functionality needed for access.

Are there some overlaps into Microsoft's world, of course, it is impossible not to have overlaps. Microsoft's strategy is to own the real estate or property and then allow companies like Citrix to come along and build buildings that generate rent. Some of the rent goes to the property owner and the rest goes to the landlord -- that's how they grow. Microsoft depends on companies like Citrix to improve property for them and they benefit from it. Every dollar we spend on research, design, sales and marketing goes directly to benefit them. You can't do anything with a Citrix piece of software without Microsoft, so it is pretty simple. We are not the only company to do that. In Microsoft's new world, the world of .Net -- where applications are designed in components to use the network instead of the computer bus to communicate with each other -- they need partners as much as ever.

Ok, if Microsoft isn't a competitor, how do you feel about Tarantella? It recently bought New Moon, which puts it -- productwise -- in direct competition with Citrix. Are you not worried that they will feed on the customers you are ignoring?
They have the same economic issues getting to these customers. I think it is smart to know where you should be focused and where you shouldn't. If they can figure out a go-to-market methodology where the economics do work, I think it is fantastic. The reality is that their revenue is about 1 percent of ours. On one hand you always want to respect and pay attention to competition and on the other hand, you have to meter that amount of attention based upon how significant they are in terms of size.

Analysts are predicting that the software industry will consolidate significantly over the next year -- do you agree?
You have to be careful when listening to analysts. There is likely to be more merger and acquisition (M&A) activity, it is very likely, but the laws of physics around M&A have not changed. You know what has changed? The industry has been down for a few years and companies have focused on their own problems, so now there is a little sunshine and the clouds open a little bit outside, money is burning a hole in their pockets. People have short memories -- doing M&A, especially in software is very difficult. You have all kinds of cultural, software integration and interface challenges. It has to be approached very carefully.

So does that mean Citrix will not be making any acquisitions?
We do not have a growth by acquisition strategy. Our strategy goes like this: today, we dominate a marketplace that we created. There is a little bit that we don't have but we have done research to show that what we have is only a piece of the overall opportunity for presentation server, which is huge. If we need to acquire something to achieve our goal, we will do that. But our bias is to towards building things -- all the best software companies in the world have a bias towards building.

But when there is a time to market or a domain expertise issue, then you have to step out and buy. That is a very different angle to mergers and acquisition; you hear other companies say, 'Hey, I got to scale up so I'm going to start buying things.' I don't know anyone that has made that work over a long period of time. CA has, and BMC tries to do this, but they haven't done well from it.