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Microsoft and Citrix woo IT with branch combo

IT managers in branch offices and midsized companies are getting lots of love from Microsoft in the form of integrated packages. This time the company is teaming up with Citrix to develop a branch appliance.

Vendors are itching to help IT administrators consolidate the technology in their branch offices, but so far much of the activity has focused on network consolidation.

Now Microsoft and Citrix Systems Inc. are forming an alliance where they will jointly develop a Citrix branch office appliance based on the Windows Server 2003 R2 operating system and Internet Security Acceleration (ISA) Server and the Citrix WANScaler.

WANScaler is a WAN optimization product renamed by Citrix following its acquisition of Orbital Data earlier this month. WANScaler's main job is to speed up delivery of applications to remote users.

Although Microsoft and Citrix are both contributing to the product's research and development, the appliance will be branded and sold by Citrix. It will ship sometime in the second half of 2007. It's possible that the final product will be a family that addresses branch offices of varying sizes. For example, current WANScaler prices range from $15,000 to $70,000, depending on the size of the deployment.

Citrix competes in a crowded market for WAN optimization with the likes of companies such as Juniper Networks Inc., Packeteer Inc. and Riverbed Technology Inc. Zeus Kerravala, a vice president at Yankee Group Research Inc. in Boston, said, "This deal will help to differentiate Citrix, and Microsoft still gets its licensing revenues."

There is a lot of network and server gear shoved into the wiring closets of branch offices today. Only about 3% of branches are consolidating file server technologies so far, but the total addressable market is enormous, Kerravala said. "Every branch has a file server and all can be replaced by an Orbital box," he said.

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Cleaning up the branch office is on IT managers' minds today because of a confluence of events, said Robert Whiteley, an analyst at Forrester Research Inc. in Cambridge, Mass. First, technology in the branch office has become complex, and shops now realize they have to decentralize. The classic hub-and-spoke model that gets back hauled into the data center at headquarters no longer works, he said.

"You need to have local decision-making, content and applications," Whiteley said. "And you have to offer [branches] a full-service security infrastructure."

Microsoft is pulling out the stops to create integrated products for IT managers in midsized companies or managers who need to outfit branch offices. Earlier this summer, the software vendor created a new bundle for branches that included Windows Server 2003 R2, ISA Server, Virtual Server 2005 R2 and System Center Management Licenses.

There is also server technology for branches in development. Centro, which is built on Microsoft's next-generation Windows server, code-named Longhorn, and on Exchange 2007 will be ready after Longhorn ships in late 2007. There is also an integrated management package called System Center Essentials 2007 that will be available sometime in 2007.

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