virtualization.info

Citrix didn’t quite finish to give away its technology for free.
They started with XenServer in February, deciding to pack it with the multi-host management console (XenCenter), the virtual machines live migration (XenMotion), the dynamic resource management (Resource Pools) and a basic storage management capabilities.

To survive to this huge investment, which is on top of the $500 million paid in 2007 to acquire XenSource, the company changed the business model: profit would come from the support licenses and the sales of a premium management package called Citrix Essentials.

There’s a lot of skepticism about this new model, and while the SMB customers may greatly appreciate the move, many think that this is a nice way to slowly fade out Xen to finally adopt Microsoft Hyper-V and re-establish the well-known synergy already seen with Terminal Server and Metaframe/Presentation Server/XenApp.
But if Sun can use this model for its Solaris operating system, and plans to do the same with the XenServer competitor called xVM Server, then Citrix probably can do that as well.

Things get much more complex today, as Citrix releases a free version of Essential for Hyper-V.
The formal announcement will be given next week at the Microsoft Worldwide Partner Conference (WPC).

Called Express Edition, this version is capped to two Hyper-V hosts and one storage array.
It does have the StorageLink technology but doesn’t have the other premium features like the lab and stage management (OEM’ed by VMLogix) or the orchestration framework (Workflow Studio).

Despite that, it’s more than enough for an average SMB to build a redundant virtualization platform (Hyper-V R2 with VM live migration will be out next week) for server consolidation. And that’s a big problem.

The problem is that, while it may sound fantastic for the customers, it exposes more than ever how the Citrix strategy is totally depending on Microsoft.

If Hyper-V is free and also Essentials is free, who’s gonna adopt XenServer in the SMB market? A customer may not like the idea of using a Microsoft technology as its mission critical platform but at this point sticking with XenServer, free or not, is just not convenient anymore. And during a worldwide financial crisis money talks, more than ever.

The plan to “assign” the SMB market to Microsoft and the Enterprise one to Citrix is now crystal clear (but virtualization.info highlighted how it was evident since day one): Citrix facilitates the adoption of Hyper-V by giving away enterprise technologies like Essentials, and Microsoft directs its enterprise customers to Citrix for VDI and large-scale deployments.

But even with such defined plan, a lot can go wrong: what if a big customer decides to start a very small pilot by choosing the less expensive option (which now is Hyper-V R2 plus Essentials Express Edition)? 
And most of all what will happen when Microsoft will feel confident enough to push hard its hypervisor (let’s say Hyper-V 3.0) on the enterprise market?
Citrix has no way back. It cannot recover the customers that passed to Microsoft.

No matter how convenient and transparent Citrix makes the migration of virtual machines from XenServer to Hyper-V (for example with a live migration between heterogeneous hosts).
Switching the virtualization platform is a painful process and people will think a million times before moving.

Maybe Citrix believes that, over the long term, selling Essentials Express Edition support agreements to hundreds of thousands of Microsoft small customers will generate more profit that trying to win those SMBs by itself with XenServer.

In any case Citrix has to clarify the long-term strategy here or this endless give-away will generate more suspects than trust.