“The server model make a lot of sense now”

As the director of marketing, iBusiness, Citrix, Daniel Heimlich has been spearheading the company’s marketing initiatives for the ASP industry. He was responsible for designing and implementing Citrix’s ASP channel and service program as well as its innovative pay-as-you-go iLicense strategy. Since the launch of Citrix iBusiness in October 1999, Heimlich has played a key role in bringing more than 100 ASPs into the program. After joining Citrix in 1996, he served as a product marketing manager for WinFrame and MetaFrame. Later he became the product manager for its worldwide services.
Heimlich announced the launch of Citrix’s iBusiness program during the India Internet World in Delhi. He spoke to DATAQUEST about worldwide trends in the ASP market and Citrix’s role in aggressively supporting and accelerating the growth of the application hosting market. Excerpts:

Citrix’s key ASP applications like MetaFrame and WinFrame had set the ground for the ASP model long before the world was actually ready for it. Why has it taken so long to pick up?
I look at it a bit differently. To me it is a natural evolution. Citrix has been working in the server-based world for more than 10 years. Citrix products are essentially being used for internal ASP deployments by global organizations like Federal Express. In fact, each of the Fortune 100 companies has been leveraging on our technology in one way or another. 

A whole series of technological developments has led to this ASP evolution. Citrix is only one component of this, along with another important component, bandwidth. Like India, where bandwidth is a key bottleneck for exploiting the ASP opportunity, we have faced the same in the US. Bandwidth availability in the US at the current cost is a relatively recent phenomenon. Of course, the evolution of the Internet has had an incredible impact both from the infrastructure stand point and also from the psychological stand point in the ability of the users to get comfortable in working with an online networked technical economy. 

Another chief driver, which seems less of an issue in India, has been the scarcity of IT resources at least on our side of the ocean-in terms of getting qualified people capable of keeping pace with the rapid technological changes. So it has been a whole series of things for the natural evolution. The term ASP is somewhat new though we have actually had re-sellers and systems integrators using it this way for quite some time. But it is really sort of a different combination of factors that have actually created this new ASP phenomenon. 

Citrix’s server model reminds us of the mainframe computing system, given the current client server environment. Do you face the barrier with people asking whether they really need to go back to the server?
We went from a distributed environment as you pointed out to client server and that of course created a whole new set of freedom for the users in being able to access huge applications, especially in a very interactive and graphical user interface environment. This, however, also brought with it a whole series of problems for users-more so for the IT managers than the users themselves-in terms of managing those applications, keeping up with the latest updates, maintenance of those applications and being able to support those applications on a global basis. So, all these factors are driving businesses back to the server-based environment. Many of our customers are using server-based computing for deploying specific, mission-critical applications like ERP and CRM. 

Organizations are starting to prefer thin clients over desktops and can actually eliminate the dissonance that exist between the speed at which these applications become available including the upgrades, new versions and new features in such a model. This also increases an organization’s ability to keep up with the changes in terms of the hardware life cycle, which is considerably slower than the changes in applications. One of the interesting things that we find in Citrix is that 70% of our own internal deployments are on thin clients and the remaining 30% are on some kind of fat devices, like notebooks or work stations. However, in an organization where 30% of the desktops are fat clients, the IT department spends 80% of their time managing just that 30%. This also means that the remaining 20% of the time is spent managing the rest of the devices. So companies are realizing that the server model of computing makes much more sense these days. 

How do you view the peer-to-peer for use amongst the enterprises, especially in the current context when fat clients are still in vogue?
I believe that the world is moving in the opposite direction and towards the server-based environment. While Napster’s model has made an incredible impact at the consumer level, I feel that from the IT industry’s stand point it actually exaggerates the problem in terms of going in for a more distributed kind of an environment with less control over the user desktop. What we believe in is taking away all these complexities away from the users desktop and be able to put it in a data center. It s like giving the end-users-a consumer or a business-essentially the same benefit that we get from a telephone. If you think of the telephone that has been in use for the last 10-15 years, it is essentially the ultimate thin client device. As an ASP if you want to service your customers effectively and provide them with cost effective service, you need to keep control of that environment. Once users are downloading software applications on their individual devices, whether it is through the client server model or whether it’s through the Napster type of model, they need to keep control of each of these environment. But as an ASP, and also keeping in view the economies of scale, you cannot worry about every single telephone or desktop in this case that is deployed within the user community. So I think in order for us to get into the next level, things need to move towards a much more server-based environment.

What about some kind of a hybrid models?
I think what you are pointing towards is that it is not a pure thin client world today-what is available today is a hybrid of mainframes, client server devices and thin-client server computing. I would agree that there is a possibility of a hybrid serving particular need of users-the types of desktops the are running and the desktop applications. Yes, I would not rule this out for sure, but it certainly is not the direction the world is moving in. It is not the direction I hear our customers moving towards. Maybe the trends are somewhat different in India. But I don’t think I have actually heard of a case where any of our major customers are looking at that kind of a model. I reiterate this seriously. Of course things would evolve and it would be interesting to see where things go.

While bandwidth has definitely been an issue for the ASP model has resource ever been an issue, particularly as MetaFrame and WinFrame are extremely resource hungry at the server end?
Not at all. Our software is becoming more and more robust. It is able to handle more users than ever before. When I first joined Citrix our years ago, 15 users per processor was a standard benchmark. Now we are talking about 20-25 users. We also have some customers who are up by as much as 50 users. NT has become more stable and we have also been including other types of enterprise tools and so I think we have a truly enterprise-class model now. The customers that we have-all Fortune 100 and 80% of Fortune 500 companies-also indicate towards the stability of our software model. Generally we hear about issues which are not exactly hurdles. Usually it has to do with simple issues like fine-tuning of the applications in order to make sure optimization of the multi-user environment. We also work closely with our software partners-and we have a Citrix business alliance involving 500 members including over 200 software application vendors-to ensure that they keep on upgrading their applications with the changes in the MetaFrame environment. We are also working very closely with the software industry organization like SIIA. It’s a membership organization of around 1,500 ISPs. So, I would say that this is definitely a very stable environment we are talking about and I think the next evolution of this is ASP.

Is there much difference between your model and the trend to put in web enabled suport, the ability to run applications straight off the server with just a browser?
First of all I would say that there is a clear trend in developing web-based applications and Citrix actually embraces that. We have already announced some technologies that bring functionality of a MetaFrame environment now to a pure web-based environment. In the meantime, I would say that we still live in a world where we have put in hundreds of man-years to develop client server applications. But our finding is that the early editions of these new Web-based applications don’t even come close in term of functionality and stability that their client-server predecessors have to offer. And it is understandable. It’s a new world-we are talking about hundreds of man-years of application development as opposed to these Web-based applications that are very new. So, I would say that both things are going to happen. 

We are talking about a collusion here of a completely new software environment and at the same time we project the MetaFrame model to become viable for many more usage. It possibly would never completely go away. Are we not using the mainframe and DOS applications today? However, at Citrix we have been able to create a completely integrated user interface for the customers so that they don’t have to worry about whether the application is being deployed in a pure Web-centric environment or as an NT application or a Java or Unix application. We believe that it should be completely agnostic to the end-user and certainly that is important for the ASPs as well. That is where our new product, NFuse, comes in. The NFuse creates a customized Web portal for users. It makes available the entire applications to a server-based environment. Applications that are available both to the Web-centric and MetaFrame servers can be combined and customized in a way specific to the user’s profile. We really think that this is a whole new way of looking at application delivery.

Do you have ASPs using Citrix products for MetaFrame?
Absolutely. Our iBusiness program is running successfully globally and I have just launched this in India. This is an accelerator for the ASP marketplace. Today, we have over 100 companies already with the iBusiness program who are using our MetaFrame platform in the ASP environment. And these include companies like Cable & Wireless, Hong Kong Telecom, Telstra, British Telecom And IBM Global Services. We are talking about significant players that are using Citrix and MetaFrame as a key enabler of the ASP movement. Now, with the launch of iBusiness program in India, we want to duplicate the same success. 

We are excited about the prospects that we already have here. We are already in discussions with more than ten key ASPs in India, including some of those who are global content providers. There is no doubt that companies are deploying our MetaFrame system. In fact, I would go as far as to say that it’s the cheap enabler of the entire ASP movement. It is the cheapest platform by which companies are delivering applications today in a way that is predictable, interactive, secure and will provide the users with a whole new experience.

Since its founding in 1989, Citrix has grown steadily by selling software built on Microsoft OS. Why has Citrix stuck to the Microsoft platform?
First of all I won’t say that we are stuck to Microsoft but yes the company has been very important for us and we have definitely created lot of successes through our partnership.

But was it a logical platform considering that Unix provides a leaner high-performance kind of platform for high-end application and especially with Linux coming round the corner in a major way. In fact, NT is not the first thing that comes to mind when you look in for that kind of security and stability.

Well, we are not embracing one platform over the other. Actually we have introduced Unix for MetaFrame, Solaris and AIX for MetaFrame and also encouraging use of Java on a MetaFrame environment. Essentially Citrix is a market driven company and users have been telling us that they are deploying applications on NT and I think the success of Citrix is testimony of the power of the relationship that we have with Microsoft. Citrix has actually grown in 10 years to become a $ 500 million company. In just the time that I have been with the company-in four years-I have seen the company’s revenue grow from $ 40 million to $ 500 million. That success has come with the partnership with Microsoft but that in no way is pulling us from other types of partnership with companies like HP and with those providing other types of operating environment.

What is the nature of your partnership with Microsoft?
Our partnership with Microsoft goes back since the days the company was founded. Microsoft has relations with Citrix on several different fronts. We have developed most of the user kernels for NT called MultiWin. This is our multi-user technology and we essentially licensed it to Microsoft. That was one of the considerable licensing agreement with Microsoft. We also have a completely unique relationship with Microsoft in that Citrix is the only company that has ever had the ability to be able to work with and manipulate the Microsoft kernel. That itself shows the depth in this relationship with Microsoft. In addition to the technological and licensing agreement with Microsoft, Citrix has also worked very closely towards marketing. We are certainly doing that in India.

Are you doing some bundling with them?
We have actually withdrawn from that. Essentially, WinFrame was a bundled product with Microsoft as it was a multi-user version of Windows 3.51. We are not an operating systems company and have never really wanted to be in that business. We delivered WinFrame because there was something that was required, we had the vision and that was the best way to exploit the opportunity at that time. Now we see ourselves as a separate engine, in dealing with a more robust environment that compliments not only Windows NT but also the other operating systems environment.

How do you look at the Indian market for the Citrix products?
Well, so far we have done a pretty great job in terms of creating a brand image here in India. But I think we have barely scratched the surface in terms of the potential here for Citrix. With the recent acquisition of Powertell Boca in Bangalore, we have really propelled our plan of entering the Indian market. It’s really a matter of education for us right now. The responses that we have so far got from the customers in India shows that they are very responsive to our products. It fits their need as well as any other group of customers’ that we have seen anywhere. But it still is an education process in terms of helping people understand exactly what is server-based computing and what is MetaFrame. But certainly, I think, the efforts that we have put in to create Citrix brand awareness in the country will pave the way for this next stage of creating education that is going to translate into Citrix having a very significance presence in India.

in New Delhi

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