Earlier this week Citrix announced its Q2 2010 financial results.

The company announced $458M in total revenue, with more than $100M in cash flow.

New license sales were $149 million, up 15% from last yearLicense updates increased 13%.
Tech services grew 35%, online SaaS revenue (from the GoTo business unit) was $89 million, up 18% year-on-year.

In the Americas region Citrix revenue grew 17% from last year, in EMEA 11% year-on-year, and in APAC 31%.

Easy to expect the company reports a major growth for the XenDesktop business: in Q2 Citrix closed 18 transactions for over $1M each, 13 for over $18M and some for $5M. Some of these deals have more than 25,000 seats. 
During the quarter 3,500 customers purchased XenDesktop: 1,000 are new customers, the others are XenApp customers that used the XenDesktop Trade-up program.

This conversion of existing XenApp customers is especially interesting: Citrix reports that 20% of renewable XenApp licenses in Q2 were instead converted in XenDesktop licenses. In Q1 2010 the conversion rate of renewable XenApp licenses was 10% only. Plus, the average XenDesktop deals are 3x bigger than the XenApp ones. 
If the trend continues one may envision a future where XenApp as a stand-alone product doesn’t exist anymore.

Another very interesting point is that only 1/3 of the XenDesktop customers now use VMware ESX as the backend hypervisor. Unfortunately Citrix doesn’t specify the XenServer and Hyper-V breakdown.

Overall, The XenDesktop revenew is equal to $290M, 15% more than last year.

For Q3 Citrix expects total revenue to be in the range of $450M to $460M.
For full year 2010 the company instead expects total revenue will be in a range of $1.81B to $1.83B.

During the call Mark Templeton, Citrix CEO, claimed that Xen is now powering 2/3 of all public clouds worldwide, including of course Amazon EC2.
Of course he also mentioned how part of these Xen installations are being converted in XenServer installations, including the one that powers The Rackspace Cloud.

Templeton also reports that Citrix has now more than 460 cloud providers that signed up to deliver the Citrix Cloud Solutions framework.

During the Q&A session Templeton also provided a juicy comment on competition, specifically about Quest:

Question from Bhavan Suri – William Blair & Company L.L.C.
And then just one quick question on competition on the desktop virtualization side — and I’m not even going to talk about [indiscernible] (1:09:21) anymore – but have you seen Quest at all and do you know they’ve also been highlighted quite effectively as a big Microsoft partner in the VDI space, and how should we think about Microsoft’s relationship with them vis a vis you, and how you guys, whether you run into them or not competitively?

Answer from Mark Templeton
Well, first of all, I don’t have total visibility, and with that as a caveat, I’d say anecdotally, Quest gets considered in some cases but they get eliminated very early on. And I’d say when it comes to the strategic conversations, as they go up to the executive suite and these conversations are really about the kinds of business initiatives I talked about, technology things and some of the things I said in the prepared comments. Quickly, everyone drops out because this full range of virtual app models and virtual desktop models are really required to end up with a strategic kind of engagement with the customer. So that’s how the competitives look and our win-loss rate is remarkable on the win side, in the high-90s, 90 percentile, and the losses are miniscule.

Thanks to Seeking Alpha for the earnings call transcript.

Labels: Citrix

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In March 2009 virtualization.info published an article titled Quest uses Surgient, why not acquire it? suggesting that such acquisition would fit the Quest expansion plans and would be the natural evolution of a pre-existing relationship between the two.

Quest answered today to that question by announcing in fact the acquisition of Surgient for an undisclosed sum.

Surgient is one of the very first startups that populated the (almost empty) virtualization ecosystem in 2003.
The company initially launched a hosted virtual lab automation (VLA) solution. In 2008 it changed its business model, allowing customers to install the product on premises and reshaping its strategy to market the platform as a VM lifecycle solution rather than a VLA solution.
In 2010 Surgient changed again: it dropped the concept of VM Lifecycle Automation entirely and fully embraced the private cloud automation hype.

Quest will include Virtual Automation Platform (VAP) in the Vizioncore portfolio. There, the Surgient technology will be probably merged with another orchestration product that Quest owns: vControl, launched in September 2009.

Both Surgient and Vizioncore brands will disappear in one month from now, as Quest already announced the plan to rename the former as Quest Software Desktop Virtualization Group starting September 1st.

The acquisition is expected to be closed within the Q3 2010.

The virtualization.info Virtualization Industry Radar has been updated accordingly.

Labels: Acquisitions, Quest, Surgient, Vizioncore

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As companies continue their search for the elusive “360-degree view” of their prospective clients, harvesting all the scattered information from social networks and other content providers about these prospects can potentially be beneficial for the purposes of deploying more finely targeted sales and marketing campaigns. In fact, recent Aberdeen research published in December, 2009 — “Inside Sales Enablement: “Let Them Drink Coffee!” — found that users of sales intelligence achieve 56 percent better lead conversion rates than non-users.

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Personal data about millions of Android users could be sent to a mysterious Chinese website thanks to a set of wallpaper apps in the Android Market. That’s according to mobile security firm Lookout, which discovered the questionable apps as part of its new App Genome Project, an effort to identify security threats in the wild and provide insight into how applications are tapping into personal data and accessing other phone resources. The apps include branded wallpapers from “Star Wars” and “My Little Pony.”

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Microsoft recently announced record revenues of $16.04 billion for its fourth fiscal quarter of the year, which ended June 30. This was 22 percent up year over year. Operating income, net income and diluted earnings per share for the quarter were up 49 percent, 48 percent and 50 percent, respectively, year over year. The company provided relatively conservative growth figures in its guidance for the first half of 2011. Is that good enough? Most of its businesses are tied to the PC and server market, and the world is going mobile.

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