Nemertes Impact Analysis:

Citrix XenServer 5.5 Highlights Importance of Freeware in Recession

With 85% of budgets flat or down this past year, and 80% flat or down in the coming year, Citrix (NASDAQ:CTXS) timed well the upgrade of its free XenServer version. In addition to the multi-host management and live virtual server migration already present, the new version adds consolidated backup, broader Windows and Linux guest OS support, and Active Directory integration. Although 93% of organizations have started using server virtualization, most still have two-thirds of their workloads to virtualize. VMware (NYSE:VMW) dominates the virtualization market, but Nemertes believes that most data centers will support multiple hypervisors by 2013 - freeware with enterprise-critical function is one reason why.

Impact:

Enterprise: Was the Virtualization project stalled when the budget did? Consider XenServer to get it moving again.

Vendors: Your pitch at the 80% with less to spend should focus on lower cost access to critical function. Get the customers now, sell them more when they have the cash to spend.

Investors: Other winners in a multi-hypervisor data center should include privately held VMLogix and Platform Computing.

John E. Burke, Principal Research Analyst

http://www.citrix.com/English/NE/news/news.asp?newsID=1854962
http://www.nemertes.com/ongoing_research/nemertes_ongoing_research_spring_2009_research_benchmark_computing_and_communications

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