How Tarantella is creeping up on Citrix
At stake is the market for providing remote access to server-based applications. For customers, this means users can be given thin clients instead of PCs. This can be cost-effective, say analysts, because it removes the need for continuous PC upgrades, is vastly more secure than having PCs at the thin end, and is less susceptible to viruses. Even if fat PCs are used in place of thin clients, the latter two advantages still hold.
Citrix has been performing a delicate balancing act for some years now. Its software sits on top of Microsoft's Windows Terminal Services (WTS), adding features that let PCs and thin clients access server-based Windows applications over a LAN, a broadband connection or even a dial-up connection.
It's a little like the symbiotic relationship that the Egyptian Plover bird enjoys with the crocodile: the bird picks food out of the crocodile's teeth, thereby getting its lunch, while the crocodile refrains from eating the bird, thereby getting its teeth cleaned. It's a slightly uneasy arrangement that works only so long as the bird doesn't find easier pickings elsewhere, and the crocodile doesn't learn how to use dental floss.
MetaFrame is Citrix's bread and butter; the company depends on it absolutely for survival. Microsoft has plucked a few Citrix feathers in the past, but has refrained from swallowing it wholesale; after all, every buyer of Citrix MetFrame still needs to buy Microsoft client licences -- so if Citrix can boost the number of Windows seats, it is doing Microsoft a favour.
Microsoft has been able to deliver Windows Terminal Services, but can still only manage it about as well as a crocodile can manage a dental appointment. But that is not to say Citrix has no competition. First, of course, there is Microsoft itself.As reptiles go, Microsoft can -- when the mood takes it -- be particularly cold-blooded. Some years ago, a company called FTP Software used to provide a useful add-on to Windows, but as soon as Microsoft decided that this partner's core business made a nice addition to Windows, it swallowed the smaller company whole. There are many more such examples.
Citrix has been able to avoid FTP's fate because it moves fast and enhances its products at a rapid pace. The Terminal Services software in Windows Server 2000 was licensed by Microsoft from Citrix, but was based on old Citrix software. It was not widely seen as a viable terminal services solution in itself without the new Citrix software installed on top.
In 2002, Microsoft and Citrix reworked a five-year-old deal to ensure that Citrix will continue to have access to new Windows releases. But the fact that this was not a straight extension of the original agreement, which saw Microsoft pay to use the Citrix technology, has led many to speculate that Microsoft might try to find a way around using Citrix technology in the future, either by buying a start-up or developing its own version.
To date, the consensus opinion is that Microsoft has a long way to go before it can match the dexterity of Citrix when it comes to delivering server-based applications to the desktop. That is not to say it is not trying. Microsoft chief executive Steve Ballmer was quoted recently as saying that the relationship with Citrix is not always comfortable, but it works. Crucially, he added that even though he is happy to see Citrix succeed, Microsoft has engineers who want to do better than Citrix. Indeed, with Windows Server 2003, Microsoft has focused heavily on Terminal Services, adding COM port, drive, and printer mapping.
But it's still not there.
So what if there was another company out there who could bring to Microsoft similar benefits to those supplied by Citrix? Well, there was, and that company was called New Moon Systems.
A year ago, a Lehman Brothers report said New Moon Systems was "making aggressive steps to build a relationship with Microsoft." At the time Marc Lowe, chief executive of New Moon, said that with its help, Microsoft could compete directly with Citrix.It never happened. Instead, earlier this year, New Moon Systems was quietly snapped up by Tarantella, and therein lies an increasingly potent threat to Citrix, as well as an increasingly viable alternative for companies who have no Unix admin skills.
Tarantella is the business unit that was left over when the original SCO Group sold its operating systems division to Caldera, which subsequently changed its name to the (new) SCO Group and set about suing every Unix user and vendor in sight. Tarantella, by contrast, has remained relatively quiet, but under the stewardship of Doug Michels it has been far from inactive.
The New Moon Systems acquisition has given Tarantella something it never previously had: an offering for Windows shops.
New Moon Systems was founded in 1995, and was developed to provide remote access to Windows applications. The company -- now a division of Tarantella -- is a pure Windows play. Everything is Windows-centric, and it is all about building a management layer on top of Windows Terminal Services, using the Remote Desktop Protocol.
What New Moon Systems did not want to do was to take the Citrix approach and rebuild what already exists. Instead, the company looked at what is missing in Windows Application Server -- resource-based load balancing, printing, and application publishing, and focused on those areas. The idea was to give -- out of the box -- clients access to applications. Key to the strategy was to make something that would be easy to install.
New Moon systems believes that, like Citrix, it has a good few years on Microsoft. Max Herrmann, vice president of marketing and strategy at New Moon Systems, told me when we met recently that he reckons it would take Microsoft three to four years to come up with the next major release -- which will be the earliest that the company will be able to address the management shortcomings in Terminal Services.
What this means for Tarantella -- and for Tarantella's customers -- is that the company now has two remote access solutions: Canaveral iQ from New Moon Systems, and the eponymous Tarantella. Together, these could spell trouble for Citrix.
In the past, Tarantella could not get into companies that had no Unix admin skills because its product is Unix-based, even though it can be used to deliver both Unix and Windows applications to users. This meant that Citrix had, essentially, a clear run in firms that have only Windows expertise. Now, the acquisition by Tarantella of New Moon Systems has muddied the waters, meaning that Doug Michels' outfit can now talk to Windows shops. At some point in the future we are likely to see a version of Tarantella that runs on Windows, but right now the company is likely to be content with what it has.
And what Tarantella has should make Citrix nervous; the significance of the New Moon Systems acquisition is unlikely to be lost on Microsoft, and may just make it feel that little bit less like it really needs Citrix to survive.