Weekly Review: Citrix Embraces Future; Denies Its Past

The unveiling of its new platform codenamed "South Beach" last week marks something of a rebirth for Citrix as an ASP platform provider. Unfortunately, the transformation will have come too late for the many failed ASPs who signed up for Citrix now defunct iBusiness ASP partner program.

Two years ago, Citrix launched the iBusiness program in the midst of a frenzy of excitement about the ASP model at its annual iForum conference (see ASP channels firm up at iForum).

Revisionist History

Citrix' early encouragement of the nascent industry now seems to have been expunged from the company's corporate memory. CEO Mark Templeton this year reportedly made the astonishing claim that Citrix played no part in the initial over-hyping of the ASP model.

At the time, it saw ASPs as third-party providers that used its MetaFrame software to host Windows-based client-server software. But as soon as its partners starting gearing up to roll out solutions under the iBusiness program, the flaws in the model started to show through.

The high licensing cost and limited scalability of the MetaFrame platform made it a tough challenge to make money as a Citrix ASP, especially with generic packaged applications. Unfortunately, ASP startups such as Futurelink, HostLogic and Aristasoft had been funded on the basis that they would make money fast. They and many others failed.

Meanwhile, Citrix was having problems of its own. After a shock profits warning last June, it parted company with its founder and chief technologist, Ed Iacobucci. There followed a period of retrenchment while it rethought its strategy.

That time spent looking inwards turns out to have been a blessing in disguise. Preoccupied with its own internal affairs, Citrix was able to avoid any close association with the demise of its first-generation ASP partners. Indeed, its early encouragement of the nascent industry now seems to have been expunged from the company's corporate memory, with CEO Mark Templeton this year reportedly making the frankly astonishing claim that Citrix played no part in the initial over-hyping of the ASP model.

Now They Get It
The launch of South Beach at last week's annual user conference shows that Citrix has finally understood what the ASP model really is all about. MetaFrame still plays a part, because people will still need access to older Windows applications for many more years to come. But South Beach does much more, thanks mainly to the XPS Portal technology acquired when Citrix bought Sequoia Software earlier this year.

The missing ingredient in Citrix' first-generation ASP vision was support for Web-native online applications and services. There was a simple reason why they weren't in the vision; Citrix didn't have a platform for them. Now it does, and it's promoting it aggressively.

South Beach will provide a single, integrated portal platform through which users will be able to access hosted Web-native applications, hosted Windows applications and external online services. That final category includes online Web service providers such as ScreamingMedia and eRoom; Citrix has come back full circle to partnering with ASPs, but this time they're net-native ASPs and Citrix doesn't use that term to describe them.

The company's been picking up a few other tricks successfully employed by surviving ASPs. Customers will be encouraged to deploy South Beach in incremental modules, getting started quickly with a simple subset of features and then adding more functionality as they develop more sophisticated requirements.

Most important of all, South Beach is not aimed at third-party providers. It's an enterprise product, designed to help organizations deliver online functionality to their users, partners, customers and suppliers — echoing the increasing shift among surviving ASPs towards private-label hosting of enterprise application services.

Everyone Is an ASP (But Keep It Quiet)
What this underlines is something that Citrix, aware that its Metaframe sales have continued to grow despite the implosion of the early ASP industry, has always been close to: that the shift to online computing is not a fringe activity happening outside of the enterprise. Every organization will end up using Web-native software to put its business processes online, which means that every business in some sense is going to end up becoming an ASP, initially only to its own employees, but ultimately to every entity that it deals with.

But we don't like to call them that, because ASP is a term that's been tainted by a handful of startups that failed using an overhyped and underpowered early version of the model. And we wouldn't want to go around reminding anyone of that, would we?

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