Roger,
First of all, you come highly regarded via others.
I am not in position to offer any investment strategy regarding Citrix Systems, since I have not looked at it from that perspective. However, I can offer some input from the viewpoint of a systems engineer who installs these types of systems.
1. Hydra is geared as a tool for the enterprise, so it may not be accurate to guage demand for Citrix's add-on components by looking at prior challenges to Microsoft (specifically Stacker, which was purely a consumer product).
2. Since Hydra will support very thin clients, through efficient server use, it will probably sell well as corporations tire of continually upgrading their clients. Hydra offers relief from this very costly and frustrating process.
3. Development of Merced by Intel and Hewlett Packard is quickly making the servers needed to power Hydra a reality. With servers that can effectively dish up 32 bit applications (or 64 bit with Merced), Hydra gains even more support.
4. Successful add-on products to Window NT can sell, especially when the basic offering in the operating system lacks the robustness to solve real business problems. DEC offers excellent clustering tools, Symantec & McAfee successfully market anti-virus products, and Tandem has a nice niche in scaling NT servers. Citrix Systems may also be able to carve a nice niche too, especially if Microsoft does not offer something that stands on it's own.
In summary, Citrix will thrive, if you agree with these points:
1. Hydra is geared towards the enterprise, rather than the consumer
2. Enterprise customers are tiring of the expensive/divisive upgrade game
3. Merced will provide a level of performance to justify NT Server purchases
4. The move to remote computing (home, car, etc.) will continue to grow
5. Citrix technology is a viable solution (why else would MSFT license it)?
6. Microsoft will not offer complete services in NT for the enterprise to utilize
7. Microsoft is already challenged enough just trying to get Hydra out the door
8. Enterprise buyers consider NT a viable replacement to current UNIX systems
I believe the scenario provides a fair chance for Citrix to survive, as well as the potential to fluorish. As long as criteria 8 is met, I think their long terms odds are good, and may reap more revenue from Winframe than expected.
Microsoft is releasing a LIMITED public beta of Hydra at Fall Comdex in two weeks, we'll know a lot more soon thereafter. If it falls, I would not feel comfortable betting against Citrix Systems, since that would imply their technology is needed. Or, it may also say absolutely nothing at all :o)
Companies supporting Hydra with products include IBM, Network Computing Devices, Boundless technologies, Wyse, Tektronix, DEC, Hewlett Packard, Intergraph, NCR, Data General, and Amdahl. This is an impressive cast of characters, and suggests the long-term success of Hydra, whether with or without Citrix Systems.
The point is that the fate of Citrix is still up in the air, and therefore warrants caution before making any decision to buy or sell their stock. As an aside, I wouldn't touch it right now (it's either WAY too fat or WAY to lean, but in any case, it is not properly valued currently, and will have to move one way or the other).
The current technology crisis has only heightened the emphasis to reduce Total Cost of Ownership (TCO) of computer systems. Leveraging Hydra (with or without Citrix) is becoming a VERY viable means to do just that, since old junky 386 machines suddenly become legitimate platforms again. No need to upgrade the CPU, RAM, DVD, monitor, etc.; the only cost would be a license fee of $75 to $150 to access the server.
A last point is that Citrix offers solutions that are only now becoming apparent. For example, centralized servers can be deployed to solve bandwidth problems, it can be used to reduce field-service employee computer and support costs, and it is a possible solution to distributing enterprise-wide applications.
I will be watching all of this very closely, but before making any decision to bury Citrix, I will evaluate the beta release, and monitor the overall tone of the feedback. Although not well known, Citrix, along with DEC and CPQ (clustering and scaling), just may be one of Microsoft's most important allies.
Excellent forum Roger! Thanks to Pancho, I was able to read your analysis on short-term investing, and learn quite a bit. Although I currently invest strictly in long-positions, the opportunity of short-term trading is calling, especially when considering the prospects for on-going market volatility.
Regards, JB
P.S. Thanks again Pancho! |
