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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Steven L. Johnson who wrote (16058)	1/23/2000 2:01:00 PM
From: Mike Buckley	Respond to of 54805

Steven, I appreciate your comments about Citrix. More please, as we look closely at your point #3. 3) Citrix provides just one of many possible approaches to reducing the pain. I'd say that the ASP (application service provider) market is more likely to produce a gorilla. Some think the ASPs will bring on Citrix's tornado. One reason the stock price has risen so rapidly is that people see the huge number of ASPs signing up to use Citrix's product (thougn those same investors apparently seem to ignore management's view that serious revenue from the ASPs will be long to come.) Since the ASPs themselves constitute a royalty game, what product category (if not Citrix's) were you thinking would produce a Gorilla? --Mike Buckley

To: Steven L. Johnson who wrote (16058)	1/23/2000 6:13:00 PM
From: James Sinclair	Read Replies (1) \| Respond to of 54805

Steven, While I'm far from ready to annoint Citrix as a gorilla yet, I think you brush its potential aside way to quickly. Let me try to address each of your points from my perspective. 1) For most people, the short term pains of adopting Citrix out-weight the long-term benefits. I'm curious how you're defining 'most people'. Citrix has published studies that estimate that a company can save as much as $4000/yr per seat by going to an ICA-based architecture. The company where I work has about 5000 employees, almost all of whom have a computer on their desk. If Citrix's numbers hold true, we could save up to $20M/yr. That's a LOT of long-term benefit. 2) Moore's law, along with Microsoft OS developments, are providing continuous reductions in PC TCO (total cost of ownership). Microsoft, for one, could speed up those improvements if it was a problem 'worth' solving. Have you got a source to back this up, or is this just your gut feeling? Sure, the cost of PC's keeps dropping, but hardware only makes up about 15% of a typical corporations TCO. I know for a fact that my company's IT infrastructure costs have gone up every year for the past five years. And we haven't even begun to look at the cost of upgrading everyone to Windows2000. 3) Citrix provides just one of many possible approaches to reducing the pain. I'd say that the ASP (application service provider) market is more likely to produce a gorilla. OK, and how are these ASP's going to deliver the applications? Well, it looks like a lot of them are planning on using Citrix... FORT LAUDERDALE, Fla. - January 19, 2000 - Building upon its early success and leadership in the Application Service Provider (ASP) market, Citrix© Systems, Inc. (Nasdaq:CTXS) today announced the addition of 31 new members, including IBM Global Services and Corio, Inc., to the Citrix Application Service Provider program. This brings total membership in the Citrix iBusiness ASP program to 45, and signals rapid industry standardization on Citrix application server software for application hosting services. press.citrix.com 4) The rest of the industry has too much of a vested interest in the status quo. From my understanding of GG, a true gorilla is one that is in a position to rally a large number of partners to develop a cottage industry. I don't see this happening around Citrix. How hard are you looking? There are almost 400 companies in the Citrix Business Alliance Program at this momemt, and in last week's conference call, the company announced that almost 8000 organizations had joined the Citrix Solutions Network (mostly VARs, systems integrators, etc.). It sure looks to me like a pretty good value chain is falling into place.