Citrix reveals cloud strategy

All eyes – and ears – might have been on VMware Inc.’s announcement of its cloud computing strategy at last week’s VMworld conference in Las Vegas, but virtualization rival Citrix Systems Inc. made some noise of its own on the cloud front.

Citrix announced its Citrix Cloud Centre (C3) portfolio of products aimed at companies in the growing cloud computing service provider market like Softlayer. Skytap and 3Tera Inc.

The package includes the Citrix XenServer Cloud Edition platform, NetScaler to deliver cloud-based resources to end users, WANScaler for a secure link between enterprises’ on-premise infrastructure and cloud resources and Workflow Studio for dynamic control over virtual machines and hardware.

But perhaps the most attractive element for cloud providers is the pricing.

“The pricing model is based on the number of active virtual machines,” said David Roussain, group vice-president of marketing with Citrix in Fort Lauderdale, Fla. That mirrors the way cloud providers bill their own customers.

Citrix will negotiate pricing directly with each provider on a case-by-case basis depending on the functionality they use. “Everybody’s got unique circumstances,” Roussain said.

It’s a rare foray into direct sales for Citrix, which does the vast majority of its business through sales channel partners. Citrix hasn’t formalized a channel strategy for the C3 offering yet, Roussain said. “We definitely want to use the channel,” he said. Its role will likely be getting the connectivity tools into the hands of the service providers’ customers, he said.

Selling the resources in a metered way intrigued research analyst John Sloan with Info-Tech Research Group. “If you’re going to sell management into that space, it’s hard to justify all that spending up front,” Sloan said. Citrix is showing recognition of what he economic realities of the cloud are, he said.

“That’s one thing that’s yet to be really worked out – how companies will make significant margins on cloud services.”

Barry Lynn, chairman and CEO of cloud computing provider 3Tera, says the usual enterprise procurement process includes rounds of RFPs, narrowing the field of providers on the basis of their proposals. “Then, you write a cheque for a gazillion dollars and cross your fingers,” Lynn said.

Computing on demand should be billed on demand, he said. The worst possible outcome is that, after working hands-on with the products, you decide it’s not for you. At least you’re relying on experience of the product or service rather than a bureaucratic RFP process, and you’ve spent less than that RFP process might have cost you, he said.

Reaction from customers to the announcement at VWworld was excellent, Lynn said.

“The reaction was spectacular,” he said, with about 1,000 inquiries at the show.

“The customer response is already a resounding, ‘Yes, we love it,’” he said.

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