2016: Citrix vs. VMware

Citrix vs. VMware: Looking back over the past year, we see that 2015 brought numerous unexpected twists and turns for both Citrix and VMware, and each excelled in different ways. No one expected VMware to be acquired by Dell, nor was the disruption by Elliott Management foreseen on the Citrix calendar of events. The full impact of both of these drastic changes will have an even greater impact in 2016.

Going into next year, the battle for application and desktop virtualization supremacy will hit new levels. In addition to competing via pricing incentives, it is likely that Citrix and VMware will be competing on new levels. While there was some mudslinging in 2015, it will no doubt increase in 2016 as the competition intensifies. Customers will be caught in the middle and will be able to secure the best deals as a result of the competition.

How Citrix and VMware Each Excelled in 2015

During 2015, Citrix reigned supreme from a market share and technical level, but the frustration within the sales channel has had a negative impact on loyalty and revenue—just how much remains to be seen. That level of frustration could single-handedly change Citrix’s leadership position. VMware, on the other hand, has a good relationship with its channel partners, and its marketing organization is in fast-forward.

VMware has attracted some excellent talent and made some smart acquisitions in the virtualization arena. Some of those people and product additions actually occurred in 2014, but the impact was felt in 2015. Appending your organization with people like Shawn Bass and products like CloudVolumes are recipes for positive results.

This year, VMware has persistently sought the Citrix XenApp/‌XenDesktop base of customers for competitive wins. VMware and its channel relentlessly appealed to C-level contacts and focused discussions on pricing and one-stop shopping, which resonated well because Horizon 6 is an adequate virtualization solution that addresses most business requirements.

On the other hand, Citrix has continued to excel in delivering the technical solution, with user experience and HDX being at the forefront. Technologies such as Framehawk were released this year, which further improved the user experience over wireless connections.

Because VMware owns the hypervisor market, it is in a prime position to sell add-ons such as application and desktop virtualization. Citrix’s intermittent focus on XenServer over the years has excluded it from many hypervisor discussions. Although XenServer is indeed an adequate hypervisor, the negative perceptions persist and are proving difficult to overcome. What sits on top of the hypervisor, i.e., XenApp/XenDesktop or Horizon 6, is thus impacted.

Corporate Turmoil at Both Citrix and VMware

The Elliott Management–induced changes at Citrix and the Dell acquisition of VMware will have a profound impact within each organization. Both Citrix and VMware outwardly claim that these are beneficial moves, but anytime profound changes and instability exist internally, there is a downstream impact externally.

With a new interim CEO at the helm, Citrix has renewed its focus on its core competencies and is ending the year with 1,000 fewer employees. In some cases, that means that layers of middle management won’t stifle growth in the near year, but in other areas, the absence of some technical talent will create gaps in the short term and possibly the long term.

Regarding VMware, it’s evident that the bonds to the new parent company are becoming tighter. Dell had previously been a strong Citrix partner, and the strength of that relationship is obviously diminishing. VMware/Dell is now able to tackle projects from “one-stop shopping” perspective, which places it in a unique position.

Going into the new year, will there be layoffs and reorganizations at Citrix and VMware? Whenever profound corporate changes take place, numerous reorganizations occur that are not always palatable. Good people leave the company both voluntarily and involuntarily, and politics have been known to dominate sound business decisions.

2016 and Beyond

Citrix and VMware each have some internal turmoil to address, as well as issues. From a technical side, the engineering teams at VMware need to continue to enhance Horizon, specifically with regard to improving the user experience.

Citrix needs to address the sales channel in short order. Several years ago, Citrix was the model for the channel, but some people and processes were introduced that had negative impacts. Those cancers need to be removed.

Throughout 2016, Citrix and VMware will likely be neck-and-neck in the race for market leadership. The winner will be whichever organization can continue to excel in its strengths and address key issues, with the wild card being which organization can best survive the corporate turmoil.

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