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By | Timothy Prickett Morgan 12th August 2009 21:51

Citrix touts XenServer hypervisor ramp

Will downloads mean dollars?

Citrix Systems - which has made a good living peddling products that allow desktop users to run server-based applications - wants to make even more money with desktop and server virtualization.

The only problem is that VMware got started earlier and has the lion's share of the market.

That's why in February, Citrix put out its XenServer 5.1 hypervisor, which is based on the open source Xen hypervisor but which includes lots of other goodies, as a free download when it jumped the gun and announced XenServer 5.5 at the same time.

Both the free download of XenServer 5.1 and the early announcement of XenServer 5.5, which didn't start shipping until the middle of June, were meant to blunt the vSphere 4.0 and ESX Server 4.0 attack from VMware and its partners. So was the partnership with Microsoft, which has Citrix providing a consistent set of management tools for its own XenServer hypervisor as well as for Microsoft's Hyper-V hypervisor.

Citrix says that the freebie XenServer is getting traction in the market. Between the end of February and June 16, when only XenServer 5.1 was available for download through Citrix and hundreds of mirror sites in over 50 countries, some 100,000 users had download the code.

Between the time that XenServer 5.5 became available and today, another 50,000 users have downloaded the code, and presumably (because Citrix did not say) many of these shops went for the XenServer 5.5 release, which is arguably the first enterprise-class hypervisor and tool stack that came out of either XenSource (the original commercial entity behind the Xen hypervisor project) or Citrix (the company that shelled out $500m two summers ago to buy XenSource).

Taking a swipe at VMware, Citrix says that of those downloading the code and putting it into production, 50 are from the Global Fortune 500 firms where VMware holds sway when it comes to x64 server virtualization.

Louis Shipley, general manager of the XenServer product group at Citrix, said in a statement that this is ahead of expectations among large enterprises and that the company had expected the freebie XenServer to play well in midrange shops and service providers who want to set up cloud infrastructure to sell.

Downloads are good, but money is better. Companies have gone bust on the open source or freebie distribution and for-fee add-on and support business model - the most notable example being Sun Microsystems. (To be fair, this probably had as much to do with Sun's cost structure as it did with a shift to open source-support software sales).

The fact is, to take on VMware's dominant position with its proprietary and closed source tools, Citrix has little choice but to seek the support of the open source community, give away most of its extra goodies, and partner with Microsoft (and probably others), and try to make it up in volume. Citrix is doing everything it can to leverage its huge presence with XenApp (formerly Presentation Server and the middleware that serves up server-based applications to end users) and somehow convert this to a mix of XenServer on servers and virtual desktops, XenClient on desktops, and XenApp mixed in the middle. This may or may not work, but that is the way the playbook has to be written if Citrix wants to get a return on its $500m investment in XenSource.

As El Reg has already pointed out, Citrix has a long way to go to catch VMware, with a mere $10.5m in Xen-related server and desktop virtualization sales in the second quarter.

Mind you, that was a 250 per cent growth compared to last year and 50 per cent growth compared to the first quarter of this year. But to match VMware, Citrix has to push more than 40 times as much virtualization products and services. If Citrix is showing 250 per cent growth this year, that probably means decreasing growth rates in the following years until something close to normal growth rates for an established market settle in.

This has certainly happened to VMware already, which has stopped growing and which this week shelled out $362m in cash to buy SpringSource to expand into Java frameworks and Java application management. ®

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