Citrix fattens out thin client strategy

Information Age (London, UK), June 10, 2004

Citrix is changing. The company, best known as a supplier of utilities to run Microsoft software on thin clients, wants to be known as a data access specialist.

It is repositioning as a remote-access infrastructure software provider, pulling its products into a single family to reinforce the message, says Meta analyst Leif-Olof Wallin. Rather than focus on products such as its MetaFrame XP Presentation Server, which is a well-established tool in large organisations, Citrix's management is placing the emphasis on MetaFrame Access Suite 3, a more broadly based set of technologies.

Citrix is hoping that, as businesses move towards an on-demand model, they will turn to the company for help. Rather than create multiple connection paths into multiple applications for, say, a mobile sales force, a customer can create just one path using Citrix software.

This is an entirely sensible proposition, say analysts, but Citrix faces strong competition from middleware vendors such as BEA and IBM, as well as the enterprise application vendors such as SAP, Oracle, Siebel and Microsoft. All argue that their mobilisation tools are simple and cost effective, reducing the need for MetaFrame and similar technologies outside their core, thin client but desktop market.

Citrix, for its part, wants to become a strategic partner for enterprises. At an event for financial analysts in New York, strategy was high on the billing, but much of the content was still focused around tactical product deployments.

A video, introducing the company's concept of 'smooth roaming' - a technology Citrix hopes will appeal to companies with mobile workforces as it allows them to maintain a session across devices and locations - dated back to 2001.

Unfortunately, the notion of an executive moving seamlessly from PC to handheld computer to a large screen at home seems almost as far away now as it did then. But Citrix has won some significant customers, such as Staffordshire Police, which uses MetaFrame to give officers on the beat access to back-office applications.

Mark Templeton, chief executive of Citrix, maintains that much of Citrix's future growth will come from companies using the MetaFrame technology to enable new ways of working.

"If you were to put this in medical terms, historically [our technology] is something you administer for symptoms, like aspirin. But if the symptoms persists, you will go to a specialist to diagnose the problem," he says. He suggests that Citrix can be such a specialist, and help companies to design solutions such as mobile working platforms. "We are focusing on higher level relationships with our customers' IT people, and we are being considered much earlier in their thinking cycle."

This is critical if Templeton is to pass his stated milestone of creating a $1 billion company. In its last year, sales reached $588.6 million, so there is still along way to go.

But first the company needs to overcome the perception that it is a vendor of break and fix tools, and to persuade its customers that it is a strategic partner, not a tactical supplier. On the evidence so far, they still have work to do. Meta's Wallin describes Citrix as a "valuable tactical solution". But the number of truly strategic deals - in Citrix terms, companies adopting its "access strategy" - remains relatively small. The repositioning still has some way to go.