CTXS - Citrix Systems

[Palantir]

Has anyone looked into this firm? I'm beginning due diligence on this, and may open a position if I can develop enough confidence in my projections.

 

Would definitely be interested in hearing some thoughts.

[ItsAValueTrap]

Hmm one way of looking at it.

 

1- Citrix has no moat against its competitors.  This is ok but you can find other tech companies out there with moats (Intel, Microsoft, Google, Adobe, companies with 90%+ market share usually have that market share due to some type of moat, etc.) and lower valuations.

2- Often in the history of the tech industry is that eventually one company will become the dominant player with 90%+ market share.  So ideally you want to bet on the eventual winner.  I'm not smart enough to know who it is going to be.  Citrix, Microsoft, VMWare, or some open source solution would be potential choices in the virtualization market???

3- Apple has higher growth and a lower PE.  Of course you have a similar problem with Citrix... it is possible that Apple does not become the dominant player in smartphones and tablets.  Android currently has the largest market share.  But Apple looks very cheap compared to Citrix.

[mikazo]

I know this is anecdotal evidence, but I used a Citrix thin client system once back in 2009 and it was slow as molasses. But then, so are most thin client systems.

[Palantir]

Thanks for all your responses, to me it seems that in desktop virtualization, the way it works is there is a powerful linux server, on top of it runs a virtualization software like Citrix or VMW, and on top of that runs an OS. In any case it seems that you still need an OS for the user side even with the advent of cloud computing.

 

So the people who use VMW as their virtualization platform, what OS do they use on the client side? Is it Ubuntu?

[mikazo]

Thanks for all your responses, to me it seems that in desktop virtualization, the way it works is there is a powerful linux server, on top of it runs a virtualization software like Citrix or VMW, and on top of that runs an OS. In any case it seems that you still need an OS for the user side even with the advent of cloud computing.

 

So the people who use VMW as their virtualization platform, what OS do they use on the client side? Is it Ubuntu?

 

Yes, that's more or less how it works. The platforms I've used ran Windows XP on the client side, but it could be anything in theory.

[Guest valueInv]

Thanks for all your responses, to me it seems that in desktop virtualization, the way it works is there is a powerful linux server, on top of it runs a virtualization software like Citrix or VMW, and on top of that runs an OS. In any case it seems that you still need an OS for the user side even with the advent of cloud computing.

 

So the people who use VMW as their virtualization platform, what OS do they use on the client side? Is it Ubuntu?

The virtualization software can be embedded into the OS itself. For Eg, Linux comes with the K virtual machine already. Red Hat is also a Citrix competitor.

[ItsAValueTrap]

http://4sysops.com/archives/does-server-virtualization-reduce-costs-part-iii-software-and-payroll-costs/

"DOES SERVER VIRTUALIZATION REDUCE COSTS? PART III – SOFTWARE AND PAYROLL COSTS"

 

Basically... the main benefit of virtualization is that it can reduce IT labour costs.  The hardware cost is about the same if not more for virtualization.

[Palantir]

This is a really interesting category overall. I know value investors avoid this style of investment, but these are important emerging computing paradigms and could have strong growth and room for expansion down the line, a la Peter Lynch.

[mikazo]

This is a really interesting category overall. I know value investors avoid this style of investment, but these are important emerging computing paradigms and could have strong growth and room for expansion down the line, a la Peter Lynch.

 

This is one of the reasons that I own Cisco (CSCO).

http://www.cisco.com/en/US/netsol/ns971/index.html

[Palantir]

Regarding this firm's business model, is this how it works - A company goes into a contract with Citrix to set up a service, which will move all their computing from beige boxes to virtual desktops.

 

Is this essentially a one time deal, or does Citrix collect constant fees from this arrangement? If the latter, then it looks like there would be a nice way to profit due to the embedded switching costs.