Citrix acquires client hypervisor leader Virtual Computer

Citrix CEO Mark Templeton has confirmed Tuesday’s leaked story by announcing that Citrix has acquiring client hypervisor segment leader Virtual Computer. Templeton followed up the announcement with the news that Citrix would be introducing a new client hypervisor solution XenClient Enterprise, making it Citrix’s second standalone client hypervisor product following up from the security hardened XenClient XT.

Citrix has not yet confirmed when XenClient Enterprise will ship, but has indicated that it will see rapid development as the existing code bases are rationalized and a next-generation product released to replace both nxTop and Citrix’s current version of XenClient. XenClient Enterprise will combine Citrix and Virtual Computer DNA to deliver what should be a best of both worlds solution, combining the more mature management features Virtual Computer of nxTop Center and broader device compatibility offered by nxTop Engine with XenClient’s extensibility, better power management and integration with XenDesktop as well as the strong channel and greater resources that Citrix has at its disposal. Sources at Citrix also suggested that Virtual Computer’s management capabilities would also be incorporated into a future release of XenClient XT. Pricing for the new Citrix XenClient Enterprise has been fixed at $175 per device, a substantial saving on the current list price of XenDesktop.

XenClient Enterprise will be Citrix’s first mainstream client hypervisor product, up until now XenClient has only been available as a feature of XenDesktop, putting it out of reach of most organizations looking for a pure client hypervisor management solution. VDI adoption projections have declined in 2011 from the unrealistic peaks predicted by the Gartner Hype Cycle settled to more realistic single digit figures, Citrix needed to act take action to retain its position as a desktop virtualization leader. A recent Entelechy Associates survey of 101 enterprise IT decision-makers indicated that VDI adoption would reach only 6% by 2014 while the broader distributed desktop virtualization market, or as Virtual Computer and Intel label it “Intelligent Desktop Virtualization”, would obtain 25% of the overall desktop market at the same time. The big unknown here is how long will this opportunity last,  how likely is it that Windows 8 and specifically its Hyper-V role will render XenClient obsolete, eliminating any opportunity for Citrix in this market.

This announcement places VMware with a difficult decision to make, with the retirement of ACE, VMware has no directly comparable solution available today. VMware View Local Mode is positioned as a competitor to the XenClient edition that ships with XenDesktop, it will be difficult for VMware to convince its customers that they should view it as a competitor to XenClient Enterprise. One possible direction for VMware to take would be to purchase MokaFive. This would put VMware on a better footing than Citrix in one key area. Neither Citrix nor Virtual Computer have any ability to support local execution of Windows applications in the rapidly growing Apple sector, where MokaFive with its type II client hypervisor option has a substantial advantage (Citrix has repeatedly denied any suggestion that it is considering the possibility releasing its own type II client hypervisor). At the same time, integrating MokaFive with VMware should not present too much of a challenge, the MokaFive client hypervisor is based on VMware code. However given VMware’s clear focus on the post-PC workplace, it may well view any further investment in client hypervisors as a needless distraction.

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