 OK, so our next guest is David K. Hill. David K. Hill, come on in. David is the principal at Diligence, former Wall Street analysts, former M&A guru at EMC. Get close. Get nice and close. OK, this is SiliconAngle.com, the worldwide leader in tech innovation. We go on the ground here with theCUBE. We're in the summer tour, 2011. We've been at EMC, we've been at SAP Sapphire. We've been here at Synergy. We're going to Citrix Live. We're going to HP Discover. We're going to Dell Forum. We've got Apple talking to us, a lot of other events coming in the end of summer and fall. VMworld coming up around the corner. theCUBE, we extract the knowledge from our guests and we share that with you. We ask them tough questions. We talk tech in depth. David, you're out in the ground. You obviously know a lot about the inside baseball in the tech business. First question I want to ask you is what's your impression of Citrix? Obviously laying out a very compelling vision, a lot of meat on the bone, a lot of cool stuff to be to, that's being discussed. Obviously virtualization at the edge, Apple, Envy, they support Windows and Microsoft Relationship. Just overall, what's going on with Citrix? They have good go-to-market relationships in each of those areas and they seem to be executing. They're in a good spot right now. They're in a great spot. The market's shifted in their direction. Honestly, they were once battling head to head with VMware, but that doesn't seem like a big deal anymore, is it? Or isn't it? I think it is actually still. I think they're ahead on the desktop. I think what's interesting, though, is they are potentially the counter to VMware with the platform level in the cloud. And that's what's interesting for Citrix is this guy starts to counter VMware's monopolistic behavior in the cloud, and we've seen this before, the answer is Zen. And so Zen's getting some more attention. It could also be KVM, but for now Zen's getting more attention. What do you mean by VMware's monopolistic behavior? You mean just pushing VMware's ubiquity? Cloud Foundry from VMware, in my view, is it's Hypervisor 2.0. We've seen it before. They said we could give away the Hypervisor here. I mean, it's the cloud operating system, the pass layer. And that's what VMware's doing is essentially giving that piece away for free. Before with the Hypervisor model, they said we're gonna charge for the Hypervisor and eventually got commoditized, but they owned that anyway. With pass, they're doing the same thing only now here, it's free. That's for VMware to dominate the cloud like they did the Hypervisor, that's problematic for a lot of guys. And so I think the response is to look to guys that can stand up against that from a service provider realm and also just from an enterprise realm. And Zen's the answer to that. Yeah, what I'm saying, isn't that a playbook out of Zen? I mean, isn't that? Yeah, it is a Zen playbook, but people saw VMware win this game once and they don't wanna win it again. So they don't wanna let them win it again, whether it be HP, IBM, Oracle. Do they have a lead? Do they have a lead? I mean, does VMware have a lead? I mean, can they win it? VMware has a lead and they can win it. And they have good momentum on the enterprise side. The cloud's up for grabs, desktop's up for grabs. So you're talking about the immense value creation that VMware was able to deliver at the potential, I wouldn't say expense, but at the lost value creation of two guys like IBM and HP, they just don't wanna let them walk away with it again. That's your point about monopolistic behavior. Yeah, that's right. They crushed it on the enterprise side and now guys have a chance to not let them do it again in the cloud at the platform level. Was that the greatest acquisition in the history of the technology business? Absolutely. Did you do that deal? No, I had nothing to do. I would do nothing to do with it. Absolutely, I take zero credit for that. I mean, everyone else is taking credit. He might as well jump right in. Stu took credit for it. No, it's unbelievable. I mean, they basically bought the server without buying the hardware and they own the server effectively without having to pay for any of the liquid assets, of the assets, of the tangible assets. So Dave, John and I were talking, but we're speculating, we love to speculate and talk about who's gonna buy whom. So is Citrix acquisition proof right now? They're pretty expensive. So at 15 billion, it's just you don't see anybody taking them out because stocks run up a lot. Microsoft maybe, I mean, they need some help. They're marching, they got all kinds of new things going on. Microsoft could swoop right in. I think the asset's absolutely interesting to a lot of guys. Anyone that's getting compromised on the desktop, anyone that doesn't have a mobile play, anyone that doesn't have an F5 equivalent on the network side would look at this asset and be interested by it. But looking at 15 billion is a different story. And maybe they don't wanna swallow all four components of those business at once and they'll just start picking out of the out of the private ecosystem as opposed to spending 15 billion. Because that's, I mean, a year ago, it was half of that. So let's wait a year, let the froth come off a bit. I don't think so. I mean, I think it's gonna go north. I mean, they're in good position. You think it's overvalued right now? Valuation's relative. I mean, I don't, relative to what? I mean, no. Relative to LinkedIn, relative to LinkedIn. In your opinion, you're an M&A guy. I mean, at least you used to be. Would you look for better buying opportunities here? I don't think you, you don't chase it here. I mean, you don't, you know, strategic. If you miss it, you miss it, is that you're saying? Yeah, I mean, I don't know that you can outlay 20 billion or 15 billion, whatever numbers you were throwing around. Take 20 to get, would you say? Just do that. So the $15 billion valuation, wouldn't it take at least 20? I don't think, yeah. And guys aren't gonna let it go easily, but no one's gonna throw 20 billion out there. So for now anyway, they're acquisition proof. Yeah, I mean, until they, you know, if they really start to get real headway, and it becomes a necessity, right? If these guys start to own the cloud with Zen, if they start to separate themselves on the desktop side, Net Scaler continues to innovate. Lots of interesting stuff there. And so, you know, they'll be able to name their price if they keep executing, but for now, you know, each piece by itself is hurting people, but not collectively hurting everybody. So I think people will just watch, right? It's not an urgent acquisition for anyone, until someone completely gets screwed and needs a desktop play, you know, but, you know, Dell's doing okay on their own right now, or seems to be getting things in the right direction. Right. What about OpenStack? Obviously, you know, we talk about developer market, which we're hot on, and I'm in Silicon Valley, and you know, it's hot to talk about, you know, things like that. When you see things like LinkedIn going public, and you saw Haruku with Salesforce, and you know, the emerging Spring went to VMware, Spring Source, this is really frothy and active, and real developer community, looking for a home. OpenStack is an open cloud. What do you make of that? Any perspective? I mean, honestly, I love the idea that NASA's involved, Rackspace's involved, but it's so early. I mean, is it just a sandbox? I think it's a sandbox now. I mean, you've got 70 vendors behind it. Citrix today announced Olympus, Project Olympus, which is pretty cool. It's a Zen server, plus you get the OpenStack project, so it's gonna be Zen software, design, reference designs from Dell, hardware, and then services from Rackspace. And I assume it's gonna be cloud builders from Rackspace that's gonna go in on site, take those three components as a reference. That's the earliest access program specs, by the way. It can look different than that over time, but I mean, when you start to package this idea and concept up and start taking it to market as something that's more digestible than just this kind of nebulous thing that is OpenStack. It's more proven, I mean. Yeah, and I'm skeptical of standards. Standards are ways for big vendors to slow progress, so I mean, you know. I mean, you got a love fest of 70 vendors all claiming to be the anchor tenant of the deal. Yeah, can I just- I mean, come on, Rackspace, NASA, and Citrix. Picture that standards meeting with 70 people trying to make a decision on it. I mean, it's a conceptual, I think it's really interesting. If you could take these concepts and get them into a package where guys can now stand up private clouds based on those components, then that's disruptive and that's real. And that's borrowing from the concepts that these web guys are teaching us. Yeah, they're putting real investment in it, too. I mean, these things don't just come out these reference architectures. They take some engineering. Well, Cisco put a lot of investment in FCOE. Yeah. How'd that work? Well, I mean, throwing money at it's not the issue. You got to have the organic. Well, that's a different discussion, but, you know. There are those that argue that the jury's still out. No, I think, I mean, if you get real momentum on the enterprise side, I mean, FCOE's a different story, right? But that was a solution without a problem, necessarily. I mean, if guys really start trying to fix the enterprise architectures, and anyone wants to build a private cloud, isn't going to be able to kind of back these existing legacy architectures into it. And so OpenStacks, one of the quickest answers to get there potentially, if they get it right. If they get it right. And I think it looks good. I mean, there seems to be good momentum around it. We like that OpenStack. We like Rackspace. But again, to me, it's just an early sandbox. To me, the cars haven't hit the table yet in terms of who's going to do what in that and the benefits to a developer. Right. I mean, and whether it extends to the mainstream too. I mean, what's the appetite for the mainstream to actually start getting their hands dirty or dirtier than they have and build these things on their own? Who was, what does Citrix have to do? I mean, outside of the tech business, Citrix is known as kind of a conglomerate. They have Zen under there on the open source side and they've been in the collaboration space with some of their other products. But Zen, I mean, Citrix is not known outside mainstream. I mean, people touch GoToMeeting. Yeah, okay, 100 million. That's a cool number to throw out there. That's the number that they're throwing out there. 100 million people have touched Citrix. Okay, someone uses GoToMeeting once. That's 100 million people. Okay, you get the numbers. But they don't really know who Citrix is as a brand. I mean, so they're in a good position. I agree with you, but what do they have to do from your perspective? How would you see them succeeding? What do they need to do to be successful? Well, from a brand standpoint, I mean, I think brand's different than just pure execution. Just being on the business side. Execution-wise and strategy, I think they're, it feels to me like they have, you know, the chip spread around and doing some good things. Branding-wise, today, we prefer, generally as a whole, to pay a lot more for, you know, sexy, shiny consumer objects, right? And I don't know that Citrix is ever gonna fully play in that space, like, I mean, whatever, Facebook or whatever new smartphone you're talking about, where they could potentially do it is with something like a receiver on iPad, right? And, you know, an example I would throw out would be like a LogMeIn. LogMeIn is a, it's a SaaS infrastructure management company. But the moment they threw that thing on iPad in the App Store for 15, 20 bucks an app, I mean, the thing went viral and the stock went straight up. And so, I mean, if Citrix can attach themselves to the iPad Store and bring your own PC- And they are doing it, clearly. Yeah, bring your own PC. I mean, Citrix drives this thing. Consumerization of IT, these guys are right here, you know, at, you know, driving some of that disruption. Where do you see that going? So Citrix becomes the sort of infrastructure apps that you download from the iTunes or App Store. Do you ever see them becoming that platform? I mean, a version of that for the enterprise? The App Store for the enterprise? Well, not so much an App Store, but like enabling the cloud or browser, we were just talking about this before. I mean, what's, when you open a Chromebook and you wanna get some of your enterprise apps, what are you using? Citrix Receiver, browser-based. Their new browser-based version they just announced. So, I mean, that's pretty slick in that regard. And then you extend that to the iPad. In the demo today, they were throwing up the enterprise, they showed the receiver accessing a box, my box, which is a box net drive, drop box, and also your enterprise drives. So, I mean, Citrix is the, I think they called it the front door to the cloud, right? Or the front door to the data center. Yeah, NetScaler's the back door. You got cloud bridge in the back end and you got the other front door. Yeah, front door to the cloud, back door to the data, whatever it was. But I mean, the fact is it's an interface. Right, so, we were talking off camera about who are Citrix competitors. You mentioned VMware, obviously, F5 for the NetScaler stuff, but doesn't Microsoft wanna be the front door to the cloud? Yeah, they do. I mean, there's a bunch of. And Microsoft, you don't consider them a competitor of Citrix at this point, right? Well, Microsoft doesn't compete with anyone until they do, right? I mean, there's a bunch of kind of opportunistic companies that surround Microsoft and take advantage of, they're just slower development cycles. Quest has built a business on supplementing Microsoft. And you're saying Citrix is one of them. Well, yeah, I mean, I think Citrix has become more strategic because, as guys see the kind of client OS getting marginalized, then guys like Citrix that come in become a lot more interesting to guys like Microsoft. And eventually, at some point, it becomes just too interesting that they have to own it, and that's a different discussion. All right, David, we're out of time. Thanks for coming on theCUBE. Awesome. I knew you'd be awesome. We'd love to have you back. Yeah, he's got great CUBE potential, dude, he's good. You're really good on theCUBE. Anytime you wanna come on theCUBE, we'd love to have your perspective. It's really right to the heart. It's good, it's accurate, very factual, and deep. We appreciate the time on theCUBE, and if you're around tomorrow, swing by. All right, all right. And we'll get your second take on the second half of the conference. So thanks.