Citrix will lead the desktop virtualization market says Morgan Stanley

Posted by Staff   |   Friday, July 30th, 2010   |  

Last week reported about an analysis released in June by Goldman Sachs which forecasted a neat leadership of Citrix over VMware in the desktop virtualization market by 2013. Apparently Goldman Sachs is not the only one to believe so.

Even earlier than that, at the end of May, in its own intelligence report Morgan Stanley forecasted the desktop virtualization market revenue at $1.5B by 2014 and the market share breakdown in this way:

We identify large enterprises, govt, and education as the target segments, leaving SMB penetration as upside, and est. penetration of ~13% (47M PCs) to be virtualized by 2014, out of an estimated total installed base of 370M. We assume pricing declines 8%/year and that VMW and CTXS maintain 80% share through 2014.

we believe CTXS will likely hold the lion’s share of the market at 48% in 2014 vs. 36% for VMW. This implies a $735M rev. opportunity for CTXS in 2014, and $300-500M of potential rev. upside over the next 4 years.

we believe VMW’s View product is evolving and the gap with XenDesktop will close over time. While some of the desktop rev. is in CTXS cons., and cannibalizes XenApp, it’s largely accretive to VMW, and could add $1B to $1.5B to cons. over the next 4 years.

The two reports are surprisingly similar in terms of market share. This means that while VMware is a recognized leader in the server virtualization market, well ahead of competition says Gartner, it can’t persuade investment firms about its capability to execute in the desktop virtualization space.

The events of the last months didn’t help the company to change this perception: VMware delayed its client hypervisor, Client Virtualization Platform (CVP), several times at the point that the project seems indefinitely postponed now; its Desktop Business Unit lost the Vice President and General Manager, Jocelyn Goldfein; and the company’s top executives suddenly are very skeptic about the future of VDI, to the point that they can’t forecast the adoption rate by the end of 2011.

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