Citrix is preparing to launch the most important product release in its history, just as it faces new competition, from Microsoft.
Having had the multiuser Windows market to itself, it must now persuade customers to buy its Metaframe server software in addition to Microsoft's new competitive product, Windows Terminal Server. While Microsoft's endorsement of multiuser Windows will undoubtedly expand Citrix' market, it must now compete on the added value its product will offer - something it claims it can do.
The company appears to be on a roll. At the Comdex Spring show in Chicago this week, terminal manufacturers like NCD, Wyse and Boundless were demonstrating new devices using Citrix? ICA technology to connect to its upcoming Metaframe server software.
On Monday, the company announced record earnings, posting revenues of $49.3 per cent (up 129 per cent from last year) and net income excluding one-time charges of $16 million (up from $7.5 million).
Citrix' success was built on Winframe, groundbreaking software that allowed multiple non-Windows systems to access Windows applications remotely. Citrix claims it has sold more than one million user licences to date.
Because of licensing issues, the current Winframe is still based on Windows NT 3.51 and its outdated interface. Metaframe will provide the long awaited upgrade to Windows NT 4.0 ? and to the Windows 95 user interface.
But there?s a catch. Unlike Winframe, which runs directly on top of NT 3.51, Metaframe will require the upcoming Windows Terminal Server (WTS) from Microsoft to run. This was the outcome of protracted - and often painful - negotations between Microsoft and Citrix last year as they reworked their long standing licensing deal.
Last year Microsoft, scrambling to respond to the challenge posed to its PC architecture by the network computer, made a deal with Citrix. Microsoft licensed part of Citrix? technology, Multiwin, a software layer that turns NT into a multiuser operating system. Multiwin is the basis for Windows Terminal Server - formerly called Hydra and the centrepiece of Microsoft's own thin client approach based on Windows terminals. WTS is expected to be launched by the end of this quarter.
Microsoft paid $75 million upfront for the Multiwin licence, and will pay up to $100 million in royalties, depending on sales.
On top of Multiwin, Microsoft implemented its own protocol to transfer Windows screen content and keystrokes between the terminal and the server. This protocol, called RDP, will only run on Windows platforms such as Windows 95 or CE.
Windows Terminal Server will do a lot ? though not all ? of the things that Citrix' Winframe and its successor Metaframe do. Installing Metaframe on top will add support for Citrix? own ICA protocol, as well as a number of management and scalability features lacking in the MS products.
But this means that Citrix, rather than being the sole provider of multiuser Windows, will now have to compete with Microsoft?s offering ? while at the same time requiring users to install the basic Microsoft software first. So Citrix must convince customers who buy Windows Terminal Server to shell out extra money and install Metaframe on top.
Citrix appears undaunted by the task. Senior product manager James Marsala claims the multiuser functionality offered by WTS and Metaframe are as different as using the Notepad that comes with Windows, or a real word processor. ?It?s nice to have something that works out of the box," he said. ?But if you?re thinking about enterprise applications, you need ICA?.
Metaframe will offer a number of features missing from Windows Terminal Server. ICA will run on non-Windows systems including Macintoshes, Unix workstations, Java based NCs and any system running a browser.
The new version of ICA will allow sound, which RDP does not currently support. And, when running on a Windows PC, local Windows applications and remote applications will look and work in exactly the same way, and remote applications will be able to print on local printers.
On the server side, Metaframe offers load balancing, the ability to spread the user load evenly over a cluster of servers. And it offers powerful tools to manage users and to 'publish' an application to a group of users at one time.
Finally, ICA also works over the Internet, allowing any system with a Web browser to access Windows applications running on the Metaframe server.
All these features might swing enterprise customers towards Citrix.
At Comdex Spring, Citrix introduced a key component of Metaframe: the first ICA client software to run on Windows CE. This software will allow terminals running the cut down Windows OS to access Metaframe. CE is being pushed by Microsoft as the standard operating system for Windows Based Terminals, and terminal vendors such as Wyse, Tektronix, NCD and Boundless have all committed to shipping such systems.
On the Comdex floor, most Windows Based Terminal vendors were demonstrating both solutions - terminals accessing WTS using RDP on top of Windows CE, next to terminals accessing Metaframe using ICA on top of either a proprietary embedded OS or CE. IBM and Sun are among the companies that have licensed ICA for use on their NC platforms.
Meanwhile, the outlook for Windows Based Terminals is good. Analysts are projecting that, now Microsoft has officially blessed the multiuser Windows concept, it will find many new adopters.
Last month, IDC predicted that the WBT market will balloon from worldwide unit shipments of 302,000 in 1998 to five million by 2002 ? out of a total thin client market of 6.8 million. That?s a much bigger pie. Even with a modest piece of it, Citrix could flourish.
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