Virtual Desktop (VDI) technology has been around a long, long time. Way back in the day, before my analyst days I actually worked for a Citrix reseller and did a fair number of virtual desktop deployments, although it was known as "thin client" technology at the time. Since then VDI has evolved by leaps and bounds, and things that were problems such as local peripheral support and printing are no longer issues today. However, through it all, the one thing that has remained an issue for VDI, limiting its value proposition, is multimedia applications--most notably voice and video. As VDI becomes more mainstream, overcoming these issues would be significant for Cisco whose enterprise business, in many situations, is led by voice and/or video. Network may drive more revenue, but it's often led by a collaboration sale.
To solve this issue, Cisco released a new Linux based VCX VDI (VCX 6215) appliance and formed a strategic partnership with Citrix. The 6215 has a built in media engine to process multimedia traffic at the endpoint itself to improve the quality of experience. Additionally there is a VCX 4000 software load that runs on Windows PCs for organizations that do not want to use the appliance. The alliance with Citrix is designed to optimize the delivery of multimedia to branches over the corporate wide area network. Cisco will be leveraging the Citrix HDX remote access protocols to optimize the performance of VoIP and IP video traffic in a virtualized desktop environment.
I see this as a significant step in the maturation of VDI as a mainstream technology to help solve the consumerization issue that many IT managers face today. A few years ago the majority of IT leaders I spoke to wanted nothing to do with consumer technology in the work place so they either banned it or looked the other way. Today, consumerization is in full swing and organizations that do not allow it face losing employees to competitors that will be more aggressive with their consumerization plans.
I know several organizations that have looked at VDI as a way of securely managing the shift to consumerization. Instead of having to rewrite applications and trying to synchronize data between all the various devices, the applications and data can be centralized and then delivered over VDI. As I said earlier though, one of the big missing pieces of the VDI puzzle was support for multimedia.
For companies that want to head down the VDI path, they would need to either live with subpar performance of multimedia traffic or run VoIP and video natively and then run the other applications in the virtual desktop. The second is the more likely of the two scenarios but still leaves the problem of having to update software on multiple devices, which can create feature mismatch and synchronization problems. VDI is a much cleaner, simpler way of solving the problem.
The announcement also included a commitment for some joint technology development between Citrix and Cisco that will come next year, so we'll have to wait and see what the future brings for the two. The addition of the virtual solution gives Cisco a unique go-to-market now as they can offer UC solutions that are cloud based, virtual or physical and fit well into its Cius tablet plans.
Citrix is a great partner for Cisco with respect to VDI and is a bit of a departure for the company. A couple of years ago it appeared that anything Cisco did with virtualization would revolve around VMWare, but despite VMWare’s dominance in the data center with server virtualization, no one understands desktop virtualization like Citrix does, so it should be a mutually beneficial relationship for Cisco, Citrix and customers of both organizations.
One final note here: if Cisco gets its way and the Government passes the repatriation holiday, Citrix would be an interesting acquisition target. With a market cap of a shade over $11 billion, I believe it would be the biggest acquisition in Cisco’s history, but it would add a significant amount to the Cisco portfolio. It’s still infrastructure so it keeps Cisco out of the application space; it would add to Cisco's data center story, and be a nice high-margin business to add into the Cisco portfolio.
Until that happens though, this partnership does have a significant amount of potential so let's hope both companies take it seriously and bring the communications world into the virtualization fold.
