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Technology Stocks : Citrix Systems (CTXS) -- Ignore unavailable to you. Want to Upgrade?


To: Robert A. Curtis who wrote (5223)3/13/1998 12:10:00 AM
From: NicholasC  Respond to of 9068
 
Robert,

I think you're touching upon an area that hasn't been clearly addressed here on the thread - Total Cost of Ownership (TCO). TCO(and speed of deployment) is the crux behind a company implementing thin-client.

I'm sure that virtually everyone on this thread has experienced that computer hang-ups, the rebooting, things not working the same way every time, etc. of owning a PC. What do you want for an $85 operating system and a $1-2k computer. Think about the time you've spent troubleshooting your PC, setting up programs, fiddling to get them to work and then, when they all of a sudden stop working, fiddling to get them to work again.

Put this type of scenario in a decent sized company and it magnifies. Contrary to popular opinion, the cost of owning a PC/workstation, in a company, costs from 30-40k per year. The 2-4k paid up front is a pittance or negligible.

Personally, I initially rejected these numbers when I saw the studies years ago. Subsequently, I sat by the cash register and watched the money go out(figuratively speaking). Deploying a program throughout a company cost more than you think. You've got to distribute the software, see that it is installed, see that it is setup in some standard way, train the user on how to use it(don't and they'll either not use it, so throw your investment thus far out, or they'll learn during working hours on their own, thus cut their productivity substantially and probably never really learn program well), etc. Thereafter, when the program breaks you've got to fix it. If there are bugs, install updates. And of course, train the user some more. You get the picture. Gets really hairy when you add multiple programs, network, modems, Internet, WAN, etc.

Computer guys to the rescue - network installs, automated configuration, computer based training, etc. - that'll fix. Well, from experience, computer guys are worse at controlling/managing costs. This "automation" often creates bureaucracy, you're dependant upon the computer-guy for everything. As an example, I've seen it take a month to install a single program on a single machine at a major US corporation. We had to wait for it's "automated" installation. (of course there are ways of dealing with all the foregoing).

Who else has experienced the same?

Well, Winframe is a reasonable, but not the only and not always the best, counter-force to such problems and costs. One application install is made. If it ever breaks you only have to fix it in one place. Everyone gets the same interface (reduced training costs - users share what they know). No additional software needs to be sent out, installed, configured. Everyone is on the same software version. Etc. TCO is significantly(significantly, not completely) reduced.

So, when some say that Citrix is "raping" people for $500/seat, they are really missing the boat. $500/seat is puny compared to the savings in TCO. FedX knows all about this as do government agencies and schools that are full-tilt on the road to implement thin-win. Please note that thin-win is not for every situation, just some.

Right now, there isn't any viable alternative and I don't know of any significant organization that is sucking their thumb waiting for MSFT to make the ideal thin-win. They'll buy Hyda with Picasso without a second thought.

Sure, some day evil MSFT will eat everyone(for reasons I'm not sure of), but for some time(years). Citrix will be working shoulder to shoulder with them. Check the press releases CTXS is in virtually all of them. That's the deal. -N



To: Robert A. Curtis who wrote (5223)3/13/1998 8:17:00 AM
From: MikeM54321  Read Replies (2) | Respond to of 9068
 
Rob,
What if MSFT decides to make it (thin client/fat server) intergral to say NT6.0 at the end of 1999? Then whoever purchases NT6.0 will have thin client/fat server for "free." This is how Microsoft could squash Citrix no matter how large the installed base. Look at how many people used WordPerfect and ended up scrapping it in favor of the great "Office95." Or how about the Lotus vs. Excel battle. Lot's of people had WordPerfect and Lotus installed, trained on, and in use. Yet MSFT beat them all with Office95.

Look at how MSFT is probably going to squash Netscape. IE4.0 is going to be built right into the operating system for Win98 and the justice department isn't going to do a thing about it because they don't understand what is happening. How many people will feel confident ripping out IE4.0 out of Win98 when Bill Gates says, "It's integral and will ruin Win98"? Very, very few people are going to actually try to disect IE4.0 out of Win98 in my opinion. You can have a browser that is woven into Win98 or get an add-on. I think most will live with what's built in already. I can't believe MSFT got this one by the justice department. Sounds like they will only have to take off the 1kb icon on the desktop as their punishment. Big deal.

As far as Citrix, I could be wrong but I thought I read how MSFT is already building RDP right into NT5.0 for those that want it. Or the user can opt to go with an optional package that they pay extra for and that's when Citrix gets it's royalties.

My point is MSFT has two years to work on RDP, then say it's "integral" to NT5.0 when it's released at year end 1999. How many customers are going to try to unbundle it, purchase Winframe for real money, and install it over MSFT's Gatesframe?

I'm a big Citrix fan myself. The only thing that held me back from previously purchasing more was MSFT being able to squash Citrix if the market turns out to be lucrative enough to do so. Obviously Ray Thackeray (previous post) thinks it will be big and MSFT will take out Citrix. If the justice department came down hard on MSFT recently, then maybe I would bet against Ray and invest more money into Citrix. But they didn't seem to understand the problem with a relatively simple browser battle. Do you think they would ever figure out a thin client/fat server battle?

But no matter how you cut it, it does appear Citrix has a two year reprieve to build up it's fortress against MSFT, and who knows what the stock price may do in these two years? It's already a two-bagger for me. Most are slow to understand the downside regard CTXS vs. MSFT so maybe the stock will still take off? Also in the end, MSFT may just end up purchasing CTXS and the previous asking price (MSFT balked) of $400 million may seem cheap!
MikeM(From Florida)

PS I'm doing a lot of my writing from memory of research done over a year ago. I could easily have some facts wrong.