There have been lots discussions lately about what’s happening around Citrix XenServer. Perhaps too many. For what it is worth, I was one of the people discussing this on the net (Twitter, Blogs etc) with some other folks. I originally drafted a blog post when Citrix bought XenSource but it never made it (officially because I was busy, unofficially because I couldn’t figure out “why”).
I think that what it is happening is pretty clear at this point. The market landscape is being consolidated with Oracle acquiring VirtualIron as well as the “Sun Xen thing” within the overall grand plan of the acquisition (of the remaining) of Sun. All these solutions have hardly, in the past few years, managed to make a difference in the industry and their names were floating around more with the hope that VMware could feel more pressure and competition, and hence lower the prices. In the meanwhile, VMware increased their price which speaks for itself.
This is leaving (apparently) the x86 virtualization market with 3 relevant viable alternatives that are VMware, Microsoft and Citrix. I have always said this is going to be a two-horse race and I still stand behind this statement. The first horse is VMware and the second horse is what I call Microtrix ™. There have been a nice Twitter discussion a few days ago on why Citrix bought XenSource and the future of it etc. This was my tweet in the discussion which, in a way, summarizes my thinking:
My XenServer in 140 chars: a non conventional weapon ordered by Microsoft for Citrix to use in the “meanwhile” (meanwhile Hyper-V matures)
While I have always said I am a geek, you can’t afford to not look at all this from a business perspective. So the discussion is not so much “features related” but it is rather more like “how a vendor is going to capitalize on something”. Because, at the end of the day, all vendors are vendors for a single reason: $$$.
And this is what never worked out for Citrix in my opinion. This is what I miss from a business perspective. Don’t get me wrong, I am not saying “XenServer is not a good product!”. I am rather asking … “why XenServer?”.
So Citrix bought XenSource more than a couple of years ago (off the top of my head – I am on a train and not connected) and the idea was that they would have engaged with VMware to win a chunk of the promising business VMware was leading. 500M$, at that time, was a big investment but something you could afford to spend if your grand plan is to win a slice of that lucrative market. Immediately the whole thing sounded a bit weird for at least a couple of reasons:
- That was not Citrix core business: they essentially deal (very well) with end-user application virtualization at multiple levels. They are not so much into the data center if not for centralizing something that is otherwise distributed on the end-user desktops (oversimplification!).
- Microsoft was to come out shortly with their very first implementation of Hyper-V and it was clear that XenServer was going to compete with it.
I was struggling to fit this Citrix strategy into the bigger picture, especially because of the strong Microsoft and Citrix relationship – someone refers to Citrix as a fully independent Microsoft subsidiary, go figure. So while they were “in bed” at the Corporate level they would have forced their respective sales fields and channels to compete at the local level. And we are not talking about a mere add-on tool where there is slightly competition. This would have been a fierce battle for a key layer (and a tremendous point of control) in the data room. Not peanuts folks!
Well that was it anyway. So we lived in this limbo for quite a while without bringing up again this concern until Citrix broke the news just before VMworld Europe 2009. Just prior to the event they made the announcement that XenServer Enterprise (I mean the high-end version with all the fireworks) was going to be given away for free. Yeah you got it right: the technology they bought from XenSource for 500M$ was to be given away for free. And you may rightly wonder “why?”, especially if you consider that the Citrix business track record, as far as I can say, is not that of a charity nor you can say – more seriously – that Citrix is the kind of company that gives away licenses for free because they make money on professional services and support. Not at all: they have always been in the business of selling you a great piece of software (Metaframe / XenApp being an example) for a great amount of money and profits. Not only that, they were now putting lots of R&D efforts into a product that was going to generate 0 revenue and hence 0 profits. This can’t be Citrix I wondered! My assumption of “lots of R&D efforts” comes from what they used to tell customers asking “what is the value of Citrix XenServer as opposed to the freely available open source Xen package?”. Their position was, in fact, that they were putting into the base open source code some additional functionalities and enterprise-grade testing of all components. That’s what customers were paying for.
Immediately afterwards, they made a new announcement where they stated they would be developing add-on management products for XenServer (called Citrix Essentials) to extend the basic capability of the XenServer technology. This was putting them somewhat on a track that did make more sense if it was not for another part of the same announcement: in fact, they stated that these add-ons would have been available to extend the functionalities of both XenServer as well as Microsoft Hyper-V / Virtual Machine Manager. And this, again, made me wonder: they now have the possibility to making money on both the free product they develop and maintain or making money on the free product that Microsoft develops and maintains. So why bother with developing and maintaining your own free stuff if you can off-load the burden to your pals?
Citrix didn’t take too much to answer (with facts) that question. The latest news is that Citrix announced, a few days ago, that they are going to donate to the open source community not only the Xen hypervisor itself (which is already open source) but the whole proprietary stack that XenSource and then Citrix have been developing around it (and for which Citrix paid 500M$ I would add…). At least this makes more sense for them as, if we go back to the previous discussion, XenServer is now no longer on their R&D budget. However, it doesn’t answer why they spent 500M$, in the first place, to get to this point in just after a couple of years.
Another weird thing I heard lately is that, in the latest discussions on the web, Citrix has also provided an interesting success metric for XenServer which is the amount of profit loss that XenServer caused to VMware. Now, every single vendor is allowed to spend their own money as they wish (as long as the investors are happy) but they may allow end-users to wonder why they have invested 500M$ in a company just to hurt the (current) leader in that space. I would say that you don’t enter a market, as a newcomer, spending a lot of money to buy something and turn it into a freely available open source software in a couple of years… with the only intent to make the leader loose money. However, you may want to do so if you are in a dominant position and you feel the pressure from the leader of a segment where you are still late-to-market. Are you guessing?
To recap, this is what have observed in the last few years:
- VMware has grown in relevance in this industry.
- Microsoft feels they may be loosing an important point of control in the data center (to VMware) but are not ready to counter with Hyper-V (R1).
- Citrix buys XenSource (one of VMware most important potential competitors) for 500M$.
- Citrix engages a battle with VMware (and apparently with Microsoft) to win the hypervisor battle.
- Citrix gives away XenServer for free in an attempt to hurt VMware even more.
- Citrix announces the Citrix Essentials package that would extend hypervisor functionalities for both Citrix XenServer as well as Microsoft Hyper-V.
- Microsoft announces the availability of Hyper-V R2 (which fills many gaps they had with the VMware offering).
- Citrix is to donate the XenServer code to the open source community.
I am not sure about you, but I see something here between the lines.
The latest Citrix take on this is that they didn’t waste their money as XenServer is a key component of their XenDesktop strategy where they use XenServer as the hypervisor to serve the back-end infrastructure and they are using the Xen kernel to build the client hypervisor platform for off-line VDI scenarios and the like. I don’t want to dispute this. There is nothing wrong with this strategy and I think that Citrix also has a technology lead vs. VMware when it comes to application virtualization and VDI (just like VMware has a technology lead for the back-end infrastructure). My mere argument is that, at this very point, they could have done exactly the same thing without spending the 500M$ in the first place back in 2007. For example:
- They could have added support for their XenDesktop to a XenSource backend (similarly to how they provide support for VMware and Microsoft hypervisors today).
- They could have developed Citrix Essentials for both XenSource and Hyper-V if they really thought it made sense for them to do so.
- They could have taken the already open sourced Xen hypervisor to create their own client hypervisor for off-line VDI.
I can’t think of a single thing that they couldn’t have done leveraging the Xen open source project or leveraging a partnership with XenSource and yet keeping 500M$ in their wallet… I have too much respect for Marc Templeton for not insinuating that there was a larger plan in this XenSource acquisition.
Just to make sure we are all on the same page, this doesn’t mean Xen(Server) is dead by any means. It will continue to live and grow in the open source community and it will evolve over time. For example it will be a very compelling building block for those (big) service providers trying to implement cloud services. If these players could afford to build everything in house (as Amazon did) and if they don’t want to deal with the commercial tricks and license limitations of a more “commercial” package, such as VMware vSphere, then Xen(Server) is a great fit. These customers, in fact, may not see vSphere as a good fit since, while the ESXi hypervisor is free, it does require Virtual Center to fully exploit its basic functionalities. Nothing wrong with that, but these service providers may want to leverage something more flexible and build their in-house developed stuff on it without stringent licensing requirements posed by the vendors.
Similarly, typical commercial customers may appreciate a more off-the-shelf / vendor owned product such as VMware ESX/vCenter/View or Microsoft Hyper-V/VMM/Citrix Essentials/XenDesktop. That’s the two-horse race I was talking about. The VMware vs Microtrix ™ positioning in the industry is beyond the scope of this post.
As an example, I am finding hard to understand why an SMB customer, with some 10 or 20 Windows servers to virtualize, should use XenServer as opposed to Microsoft Hyper-V with Virtual Machine Manager. While the Microsoft solution is not entirely free it would cost “negligible peanuts” and with the new R2 release it will pretty much map what the free XenServer offering can provide (High Availability*, LiveMigration on top of all), especially in a pure Windows context as it is often the case in SMB accounts. By the way if some Linux support is required Microsoft is doing a great job at that too with Hyper-V and if you want even more functionalities the Citrix Essentials package will do!
Back to my tweet above, the warning I want to give you is this: watch out because weapons are used and then decommissioned when they become obsolete (from a business perspective). Perhaps I am wrong. Only time will tell. In the meanwhile, mark my words (I can’t do worse than what Gartner/IDC did years ago when they speculated Itanium would have ruled the world by 2008 anyway).
I have tried to interpret what I have seen in the past without any biased opinion (I hope). At least I tried to keep on straight facts. Perhaps my name will show up on some black-lists after this post; at least I hope it will give end-users an additional point of view to think about before committing to a strategic hypervisor decision.
P.S. What’s in this post only reflects my personal opinions and not those of my employer.
* Roger Klorese from Citrix pointed me to the fact that High Availability is not included in the free XenServer offering being open sourced but it’s rather included in the fee-based Citrix Essential package. Thanks Roger for the heads up.