Microsoft and Citrix add Longhorn to pact

Citrix Systems Inc. and Microsoft Corp. in late December agreed to extend their long-standing partnership to include Longhorn server software.

Under the latest contract, Citrix agreed to support the next version of the Windows Server — code-named Longhorn — in its access products. The five-year agreement also gives Citrix continued access to Microsoft Windows Server source code while providing for patent cross-licensing. In addition, the agreement calls for new technical collaboration to enhance the extensibility of Windows Terminal Server.

The Citrix MetaFrame Access Suite runs on Microsoft’s Terminal Server, which is designed to deliver Windows-based applications or the Windows desktop itself to any computing device, including those that can’t run Windows.

Fort Lauderdale, Fla.-based Citrix’s technology allows about 50 million users to access Windows-based computers, said Nabeel Youakim, area vice president of the Microsoft global relationship at Citrix.

Because Citrix focuses its access products on extending the functionality of Terminal Server with features such as security and management tools, the agreement should reduce any customer uncertainty about whether Microsoft has plans for Longhorn to compete with the Citrix software, Youakim said.

Alan Kauffman, vice president and CIO at the March of Dimes Birth Defects Foundation in White Plains, N.Y., said his organization was relieved that Microsoft and Citrix will continue their relationship. The March of Dimes has completed a pilot and is planning to deploy Citrix technology enterprisewide to 1,500 users at 250 offices to centrally manage Windows applications.

“We are going to have nothing on the desktop,” Kauffman said. “It does require very tight integration between Microsoft server products and Citrix. This is a big investment for us.”

Steve Anderson, director of Microsoft’s Windows server division, said the pact provides Microsoft users with “continuity and the ability to integrate new platforms into their existing infrastructure.”

This deal extends a 2002 agreement that gave Citrix access to the Windows Server source code. The first formal ties between the two date back to 1997, when Citrix licensed code to Microsoft that served as the foundation for Terminal Server, said Dwight Davis, an analyst at Summit Strategies Inc. in Boston. At the time, Microsoft was considering crafting its own product from scratch, he added, but it instead turned to Citrix.

The latest agreement is beneficial both to Citrix users and to Microsoft, Davis said. For users, “it gives them assurance that there is a road map to stay on the (Citrix) platform and the assurance that it should keep pace with the evolution of the Windows platform.”

In addition, the new technical collaboration piece of the agreement may yield enhancements to the Longhorn server, he added For its part, Microsoft continues to benefit from the significant revenue Citrix drives its way — currently projected by Citrix to be about US$300 million for fiscal 2005 — from Citrix users who purchase Windows licenses.

Microsoft plans to release the beta version of the Longhorn server during the second half of 2005.

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