30 Minute Interview

“We'll beat Wall Street's prediction of reaching $1 billion by 2006”

After a series of acquisitions, Citrix Systems is expanding its product portfolio and is tapping application delivery. Mark B Templeton, President and CEO, Citrix Systems Inc and Wes Wasson, Corporate Vice-president, Product and Market Strategy, Citrix Systems Inc in a conversation with Abhinav Singh.

Mark B Templeton

Wall Street expects that Citrix Systems’ revenues will touch a billion in 2006. Are you on target and how big a role will acquisitions play in this?

Templeton: We’ll beat Wall Street’s prediction of reaching $1 billion by 2006 and we are on track. We have a clear vision and are optimistic about sustaining regular growth. We plan to grow across our portfolio of product offerings. Firstly we hope to achieve substantial growth in licencing the MetaFrame Presentation Server. We have for the last couple of years diversified our product portfolio to tap revenue streams from various technology offerings especially in the application delivery market. We have launched new initiatives such as the dynamic desktop initiative and our online services are also growing. We have been acquiring a lot of companies with the aim of getting our products faster to the market. Reflectent Software and Orbital Data are the latest deals. The acquisition of Reflectent Software helped us capitalise on real-time application monitoring technology while acquiring Orbital Data helped us offer products to optimise application delivery to users in branch offices. The earlier acquisition of NetScaler had helped offer products for optimised Web application delivery. Our aim will be to acquire smaller companies working on newer technologies having high velocity teams. We won’t look at acquiring large companies as these usually represent older technologies and the technology they work on has already matured.

Your ties with Microsoft and Intel run deep. Is this going to continue in the near future?

Templeton: Our aim is to grow independently and improve strategic relationships that we have with partners especially Microsoft and Intel who were early investors in Citrix Systems during the early 1990s. We are leveraging the power of Intel processors. Additionally we hope to grow substantially in our technical services and subscription-based services. We are also excited about the software-as-a-service (SaaS) model and help organisations in this endeavour. We look forward to offer new products as services. One example would be application virtualisation as a service. We are also optimistic about SSL-VPN technology as it involves full-time encryption and complete access control.

Has buying NetScaler helped you grow in the application delivery space?

Wasson: Business has grown manifold after the NetScaler acquisition. Application networking has contributed to over 10 percent of Citrix’s overall product revenues. We will continue to invest in this technology and feel that the application delivery business as a whole will emerge as a mature market in 2007. We feel that the next phase of branch application delivery will be driven by regulatory and data security pressures, increasing cost of branch infrastructure and continuous decline of IT resources in branches. With WANScaler we hope to achieve substantially in the WAN Optimisation space. It can speed up all applications to branch office users and has the ability to increase effective bandwidth up to 75 percent and is fully transparent to network and applications and also supports small branches and mobile users.

Is your India development centre a strategic asset for Citrix Systems?

Wasson: We have development facilities in the US such as the one in Florida, Silicon Valley and Boston. In India, we have 40 people working at our development centre in Bangalore. We aim to raise the headcount to about 200 people in the next 12 months and intend to do some entire projects out of India in the near future. The Indian centre is currently working on cutting edge products in the application virtualisation space. For our NetScaler suite of products around 50 percent of product development is done out of the Bangalore centre. Currently the WANScaler range of product is done out of the Sillicon Valley but we hope to move some part of its development to our India centre in the future.