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

To: mauser96 who wrote (6547)	5/18/1999 2:18:00 PM
From: MikeM54321	Read Replies (1) \| Respond to of 9068

Re: Expiration of MSFT's Endorsement of ICA Thread, I believe there is some confusion here about exactly what will expire on Oct 31 of this year. It has nothing to do with royalty(for lack of a better word) payments. What expires, in essence, is only a marketing agreement. You see up to that point in time, MSFT was required to send customers Citrix's way that had non-Windows clients. For future reference and to be exact, "Microsoft has agreed to endorse only the Company's ICA protocol as the preferred method to provide multi-user Windows access for devices other than Windows clients, until at least November 1999." Well this is what is expiring. As far as anyone believing some kind of MSFT payment schedule stops, that is unrelated to the marketing agreement. Now also for future reference, CTXS cut a deal in early 97 with MSFT to co-develop ICA for NT products. I wish I could quote that deal's exact terms, but I did not search for it. It's not a "royalty" or "licensing" payment. Here's a very quick summary. For the TOTAL sum of $175 million dollars ($75 mil up front, rest in payments) CTXS agreed to work with MSFT for ICA in NT products. Well I think this was mistakenly interpreted as some kind of, "royalty" payments to CTXS. Well I don't believe that is accurate. Originally the balance of the $100 mil was supposed to be on MSFT's NT sales performance goals. Well I believe CTXS renegotiated this to simple quarterly payments. When this runs out (I think it's $10 mil/qtr), it's over. But luckily, it's not a big deal to CTXS because it already is a fairly small percentage of revenues. If I have this wrong please correct me. Okay. Now to my opinion of the termination of the marketing agreement. Well as I posted before, I read some reviews of how well MSFT did with their so-called, "Marketing" of thin-client products, hence a CTXS solution. Well bottom line is, MSFT's marketing of TSE (Terminal Server Edition) stunk! So what CTXS is losing in Nov, is basically nothing much. I keep trying to make a point that MSFT does not like Java. MSFT does not like ICA. But reluctantly, MSFT is being dragged into the thin client/server world. And as, I believe Ray(?) has pointed out earlier, the drivers are clearly TCO (total cost of ownership), rapid deployment, and ironically Y2K concerns. Plus there are other issues driving a CTXS type solution (not just the previously discussed ASPs) for another discussion. The Lehman Brothers analyst/cheerleader makes a lot of claims about how CTXS is sold and NONE of them have much to do with MSFT. Luckily the demand for CTXS is so strong, the analyst actually claims the product is being, "pulled" through as opposed to being, "pushed." In other words, CTXS sales channels are saying customers come to them wanting the thin client solution CTXS offers. They don't have to sell it. Thank goodness, because MSFT certainly is not helping the CTXS cause. So bottom line is, the expiration of the MSFT-CTXS marketing agreement is a non-event(IMHO). MikeM(From Florida)