Cisco VXI gets closer to Citrix and VMware, playing the field or looking for a long-term partner?

Cisco surprised a few people last Monday morning with two press releases announcing that it was to start reselling both Citrix XenDesktop and VMware View.

Unsurprisingly, the two press releases have more than a little bit in common:

“Cisco today announced that the company will resell <Vendor> <Product> as part of an integrated desktop virtualization solution that is based on Cisco Unified Computing System (UCS) … [The] Solution is one of the core module of Cisco Virtualization Experience Infrastructure (VXI) that delivers a complete virtual workspace by unifying virtual desktops, voice and video to enable an exceptionally flexible, secure work environment and uncompromised user experience.”

With just enough differentiation to have some fun reading between the lines of what was and was not said about each company’s products.

See if you can match Phil Sherburne’s (Cisco VP of Enterprise Systems and Architectures) quotes with the company he was refering to:

  1. the combined solution will dramatically simplify the deployment of industry leading virtualized desktop environments that are both affordable and secure.
  2. this solution combines the innovation of Cisco Unified Computing System (UCS) with <Product> to help our customers quickly benefit from the operational savings of desktop virtualization.

Answers at the bottom of the page.

Despite last year announcing that it was establishing a five-year technology partnership with Citrix, Cisco has remained studiously impartial in its dealings with Citrix and VMware. Positioning itself as the best partner with the best technology to deliver and support enterprise class VDI environments, regardless of whose software is being used. Leaving the choice of View or XenDesktop,  ESXi or XenServer, to the customer – with guidance where appropriate from Cisco, but without any obvious attempt to push one partners product or the others.

For the moment, it looks as though these announcements are no more than logical next steps in Cisco’s VXI sales and marketing plan. Cisco has previously indicated that it felts it necessary to create a one-stop shop for implementation consulting and support of VDI technologies in order to maximize its opportunity to grow the technology, and it has been growing its professional services organization to allow it to successfully implement large-scale VDI deployments for some time now. Announcing reseller agreements now could well mean that the sales pipeline is starting to fill, moving the company beyond the point of talking about VDI and to the point where it feels it necessary to have the reseller agreements in place to fully capitalize on them. Having said that, it isn’t possible to read anything into Cisco’s decision to announce both agreements at the same time. Given the lack of favoritism it has exhibited, Cisco would be hardly likely to announce one reseller agreement without being ready to announce the other alongside it.

It isn’t yet clear if this is Cisco’s long-term strategy for VXI or if it will choose to establish a close so relationship with a single partner.  In the long-term, Cisco might benefit more from a closer relationship with Citrix than with VMware, at least as far as its VXI plans are concerned. XenDesktop is a significantly more complex product than View, and as such is more likely to require professional services to provide support. Needless to say, if Cisco can prove itself as a trusted partner to enterprise IT decision makers in desktop virtualization environments,  it will expect to see follow on business for its UCS platform in other data center deployments.  Could this mean that Cisco might consider Citrix a worthwhile acquisition candidate?

Unlikely. There’s little doubt that a Citrix acquisition would go a long way to furthering Cisco’s cloud and data center ambitions as well as boosting network sales – Cisco reckons it earns $3 in networking sales for every $ made selling voice services, increasing to $5 for every $ earned selling video services. Considering the number of sales opportunities that are created with each VDI deployment – on the endpoint, across the network, in the data center and in the cloud Cisco’s ability to derive increased sales from XenDesktop business would be significant. There’s also remarkably little overlap between Cisco and Citrix, about the only rationalization that would be needed would be to work out what to do with WebEx and GotoWebinar, hardly the hardest decision of the century. But this was a move that Cisco should have made in 2009 back when it was flirting with consumer technologies like its ill-starred Flip acquisition. While Cisco has over $46 billion in cash in the bank today, Citrix’s market cap is currently about $13.75 billion bringing with it the prospect of a severe bout of indigestion should things not work out (contrast that with Citrix’s valuation three years ago when it was worth only about $4.25 billion, and Cisco had over $25 billion in bank). All things considered, it’s both cheaper and safer to partner with Citrix than it is to buy it and Cisco could find other more digestible prey to spend $13 billion on than Citrix.


  1. Citrix
  2. VMware

Hint  – Which needs simplification View or XenDesktop