 I mean Dave Vellante to the queue John good to see you man. I'm gonna be back in San Francisco. It's tough without you Dave I mean it's you know, it's hard. I'm like you're like my wingman It could have been that long how long you guys been going a couple hours here. We've started at seven o'clock So we had Simon Crosby on was Simon. Well first of all I want to ask you did you did you have Wi-Fi on your flight? No Damn jet blue jet blue jet blue Pioneer with the dish, but they got to get gotta get the Wi-Fi I agree. Do you have a middle seat experience? No, I had a good I'll see So I was Simon Simon was great He said that Zen and Citrix are the only vendors that have built a mega cloud and I'll see I'm getting private messages on Twitter of thing. He's wrong. He's wrong. Of course the internet when someone's wrong may like to point it out He pointed out he said VM where has not deployed a mega cloud ever and mega cloud being defined as over 10,000 server deployment Simon talked about new new devices. He's excited about new devices that connected consumer electronics. He talked about security He talked about a lot about the future environment's great interview. Well, Zen is the dominant, you know public cloud Hypervisor, right? I mean that's he said he said that without their hypervisor open source based Amazon would not exist I would estimate what 80% of the public clouds use then is that right? Amazon use it and now all the public cloud service providers. I mean VM where was not really compatible with that emerging business model So what's the buzz here all desktop all time? The buzz here is obviously the mega trends of ubiquitous IP networks is kind of an old story Obviously the convergence of networks and compute and storage The the move towards unified Communications as highlighted by our analysis with Skype and Microsoft will be a big theme tomorrow I don't want to steal the thunder. We have some scoops I want to be courteous to Citrus and not blow the scoops out there before they announce it But to me Dave the number one thing that I'm seeing is the economic recovery is driving all kinds of innovation and tech investment from from it on the IT side, but on the macro Internet side Zynga when Zynga's file to go public Carriage which are broke a story that they're going to go public LinkedIn when public last week rocketing. I mean $10 billion Value is waiting for Facebook. So I mean there's a massive refreshing of an attitude and also on an IT spend perspective of Above of an economic recovery. Well, we've been talking about all year for the last, you know 12 months consumerization Cloud and mobile and I guess that's what Citrix is all about, right? I mean they're in the heart of all that It's like our summer tour here the Cube Sapphire last week same concept cloud so mobile social We're hearing from the grapevine that there's going to be a lot of emphasis on the Personal aspect of the end user experience with Citrix where the social dynamics of the web and the person It's going to be a big part of their announcements. Yeah, well, we're definitely seeing the transition of the away from the PC era into the cloud era and the mobile era And that's what Citrix is there. That's their sweet spot, right? I mean Citrix has been around forever But they're really very well positioned for that those mega trends. So I'm really interested in Meeting some of the guests here. We got a good lineup coming tomorrow and What's today Tuesday with tomorrow Wednesday and Thursday, right? Yeah, we're gonna go to 10 o'clock right now It's 8 30. We're gonna crank it up We're bringing you all the analysis all the news the analysis not a lot of news breaking because I know there's gonna be a Lot of press releases tomorrow But again what I'm hearing is personal cloud I'm hearing a lot about the private cloud Hybrid cloud and then I'll see the public cloud where there were Citrix is at a sweet spot and of course desktop virtualization, right? I mean, that's the what a lot of what Citrix is about even though it's still You know, it still hasn't exploded onto the scene. I mean in Gartner was predicting 2012 to 2015 the years of Virtualization it's it feels like it's gonna happen. It's not there yet Here's some stats on Citrix Dave hundred million people touch Citrix go to meeting go to PC 100 million people touch Citrix and a lot of people they've ever heard of them Two of the top 10 apps on the Apple App Store are Citrix top five sass services Software as a service businesses in the world run on Citrix. So Citrix is not a small player They are big their presence And so I'm expecting to see what they do around the the mega trend of desktop virtualization, right? Well, we're talking about a two billion dollar company Again desktop virtualization is a big theme It's still relatively narrow I mean it's confined to certain industries like financial services and government and health care and relatively narrow use cases But the promise of thin client is simpler IT simplification of the experience On all devices not just your desktop But on your mobile devices as well, and that's really what we're looking for having said all that there's only about 50 customers with over 10,000 licenses now that's not a bad number, but it's not an overwhelming number either So 50 customers with over 10,000 Citrix licenses Starting to reach critical mass, but it's early days John You know Dave it's early days and I asked one of the Citrix Employees about where we are in the in the readiness of their customers. He said five or six I'm like I give it more like a two or three at best I think the virtualization trend has changed the landscape of Technology obviously just in the past three years vmware has completely remorphed their business Actually, they're now owned by EMC. You're seeing Citrix by Zen You're seeing them go to own the public cloud You're seeing a massive surge in open stack around developers and open source communities Really trying to get a foothold in that business. So you're seeing open stack becoming an interesting dynamic, but to me The big wild card is will Citrix's Desktop virtualization message hold through most people I talked to they don't give a hoot about the desktop All they care about is freedom any device. So I hate the word desktop I mean we're not on desks anymore. We're on mobile. So I think SAP last week at sapphire Really nailed it when they really emphasize mobility So I think Citrix might be hurting themselves a little bit by tying to this whole desktop metaphor Now I know they sell to IT and they got to and they have a lot of Windows 7 clients and virtualization is nice there But I question that but question to you Dave What do you think about this desktop virtualization? Acronyms like VDI have been kicked around. It's a changing landscape. What's your opinion on that? Well, I think that the iPad changed everything. I said I think Citrix knows that I think Citrix vision has to be applications delivered anywhere on any device Anywhere in the world globally 24 by 7 securely that's got to be the vision. I'm looking to hear that, you know desktop is really really desktop is a metaphor for the OS right Whatever OS that is and it should be anyway, whether it's Mac OS whether it's iPhone whether it's iPad or Windows Here's the thing that I but what I see about Citrix about an opportunity Dave I see three things that they can really do well on they have this kind of consumer play in the enterprise where people have used Go-to-meeting we've used it a few times. Let's go to PC the virtualization of the desktop Creates that iPad app like feel mobility with Citrix receiver, etc And then on the private cloud they actually have a solution there with VDI, right? So you got the personal kind of the user experience with go-to-meeting and they got video stuff coming around the bike Secondly, they got this private cloud messaging which we heard at EMC heavily and third the public cloud they without Citrix Amazon wouldn't exist so To me that taps into the developer community and the developers are driving the entrepreneurial IT economy that we're talking about This this upswing and in the economy has been driven by the by the innovation around entrepreneurship and developers So I think the the opportunity to get the developers To build the private cloud and to deliver an end user user experience to me is the triple threat for Citrix They could if they can tie that together the triple threat of user experience Enterprise clouds and then developers and innovation. They will win the day I mean, I think that's a great message if they can pull it off I'm skeptical on some areas, but I'm gonna be watching that. Well, I'm again the three big things. I'm watching our consumerization Cloud and mobile you've been talking about the consumerization of IT for a while silicon angles been writing about that Cloud obviously big mega trend and mobile and Citrix is positioning for all three of those trends Again, I think it's very narrow right now. You know what, you know a big barrier to Desktop virtualization is storage. I saw you just said sci-tech on Always a problem, right? So so the thing is that a lot of people don't understand that Desktop virtualization and server virtualization are the only thing they share is the name virtualization. They're two different things So you get VMware coming in saying oh, well, we do server virtualization So you should buy view by desktop virtualization or VDI from us and it's just it's not necessarily the case, right? It's apples and oranges. So storage again is a big barrier the storage players Really have to solve this problem. There's performance issues. There's workload issues. You've got a size this stuff It's boring, but it's really important John You know, I think it's gonna come down, you know, Dave We talk about sizzle in the steak We have to hear the announcement tomorrow to get into the sizzle and steak But clearly the sizzle is cloud the steak here is that they actually have virtualization technology in the public cloud So my question that I want to ask Citrix people is look at Okay, I buy the public cloud Can you get to the enterprises? Can you success successfully get in through the top of the stack the iPad? Can you get the virtualization to desktop if they can penetrate that layer? They can win it now. I want to hear that. I have not seen that yet. Well, they have to right I mean, in fact, I think the entire industry has to and the iPad changed everything And that that is the end game now is any device all apps anywhere And I would certainly expect to hear that from Citrix. I'll be shocked if we don't have that from Simon Crosby was on He was phenomenal, but you know Simon Crosby talked about talk about that issue. I mean well his big thing was obviously harping on VMware against them and he likes the hammer VMware Well, he said VMware is not a competitor because they don't want they don't deploy mega clouds and he made a point He said Innovations the key to success and cloud innovation right now is we're in the early stages and he said quote without the public cloud Without Amazon which they enabled to create without the public cloud Groupon would not exist without the public cloud Zynga would not exist. So you cannot deny Those those milestones the public cloud has enabled so the question is what does what happens on the enterprise? Do you buy that that VMware is not a competitor of Citrix? No, I don't buy that at all. They totally compete Right. I mean VMware is at war with everybody. I Mean VMware announced we covered VM world So we saw the transformation of VMware from being a enterprise focused company with license problems business model issues To a completely refocus under Palmer it's operating environment We call that the wind tail with EMC and VMware absolutely legitimate in my mind Well, I think those two guys are doing a great job I'll tell you my opinion on what makes VMware a real competitor is spring and I think VMware is Really going after that developer base with spring the roots of micro of Citrix are in Microsoft Right. I think Citrix has to you know, obviously knows this It's got to rapidly move off that or expand that base to include other Operating environments and and I think that VMware is very well positioned with spring to do that. That's fundamentally VMware strategy and Maritz is going hard after it as we know. Oh, so I got an update We had a walk-on guest Tom trainer from Gluster came on. He's here. Yeah, he was a guest on the Cube He sat down and we talked about HTFS Hadoop's file system and how he plays there. He was supporting it Gluster is very cool company. So what's your angle on those guys? Well, I mean, you know, Flawyer feels like that whole business is about to explode and You know, they've got to get Traction right now. They've got some nice whiz bang technology But as we've seen so many times the technology in and of itself doesn't really matter They got to get people to start writing to their platform and really commercializing the technology but you know Clustrics cluster these new emerging file systems. I mean, you know, the flip side of that is does the world really need another file system And the flip side of that is yeah one that you know, really is cloud ready I'm John Furrier the founder of Silicon angle comm and Silicon angle TV. We are the worldwide leader in emerging tech coverage You can find out what's going on on Silicon angle comm We're the reference point for emerging tech Silicon angle TV is where we put all our video This is the cube our flagship product and my co-host Dave Vellante is here with me From wikibon.org check us out Check out the coverage that John the coverage from sapphire and emc world is still Exploding onto the site. I'm still seeing the team put up highlights of videos blog posts We did a sapphire wrap-up today on the wiki. We pumped out 31 blog posts Three full days of video hours and hours of video and then research you guys how much research you pumped out tons of research Can't even count it and we'll be doing the same thing here at Citrix will be hit We'll be an HP discoverer will be at the Dell storage forum. Look for us there. It's the summer tour the cube The cube is on the summer tour 2011. We're gonna go to all the events where the tech matters We go there we cover like a blanket. We are the worldwide leader in tech sports And so you know people I was saying that last time Dave that tech to me is like sports You know there's a game going on and the executives and the people behind it are athletes And the people who do all this IT stuff are truly in my mind tech athletes because if you think about the Transformation we're seeing for the first time and before you came on I talked about the the mega trends that we're seeing The deployment of ubiquitous IP networks the expansion of network-based consumer electronics the move towards unified Communications the announced the advancements of highly scalable low-cost computing power in the cloud the convergence of network storage and compute and Finally an economic recovery. We haven't seen in over a decade is causing a massive innovation cycle And it's really exciting and there are a ton of people creating new companies jobs are changing and it's innovation It's totally cool. Well, it's fine. I said Citrix has been around for a long time But a lot of the trends the cloud the consumerization the mobile and the ubiquity of networks I mean Citrix fundamental assumption is that there's going to be a network available Even though they're doing some things for untethered folks as well But you know generally these trends are favoring Citrix and really coming into the sweet spot. So again I'm interested in learning more. It's a very competitive space. It's early days Citrix has some advantages, but it's got to have a lot of competition It's dancing the dance with Microsoft right Microsoft sort of controls the game board on this with with licensing But Windows 7 looks to be, you know, very popular with the early reviews in and I think there's you know A lot of things there that are going to be favorable to Citrix But it's got to play play nice with Microsoft and it's done a very good job of doing that And then you've got VMware but VMware's, you know desktop virtualization VDI strategy thus far has been a do-over Maybe a twice do-over. So Right now Citrix is the dominant player and Is growing very nicely its business is up. It's going to do over two billion dollars this year It's got it's got a ton of cash on the balance sheet over 1.5 billion on the balance sheet So I think it's in good shape Dave. Does cloud storage represent a threat to? NAS storage or not or can they coexist? I Think cloud is another tier of storage And I think that I think in general it's a threat more to the Traditional storage models be they NAS or block so I would say that the short answer is yes cloud is a threat to any Traditional storage model the key to the cloud in my opinion is software being able to move on a policy basis The right data to the right target whether that's a device whether that's the cloud whether that's a de-dupe target Whatever it is software is the key now And that's why you see companies like EMC and also NetApp and others investing so much into software What do you think about the we talked about a sapphire SAP's event last week? We think about the tablets impact to Citrix's business you mentioned it when you came on earlier The tablet has been the tech jewelry for business executives. I mean on the consumer side obviously it's selling out like hotcakes The iPhone obviously game-changing since 2007 So that's the mobility smartphone craze, but the tablet brings the virtualization desktop equation Into play what do you think of the iPad as a disruptive enabler or a pleasant enabler? John I think the CIOs look at it as a real opportunity and as you call it a pleasant enabler CIOs want to build a secure environment for their applications to run on any device of a consumer device Professional device a desktop a laptop even even an individuals device my own You know my an employee's cell phone for example or smartphone So they want to enable a secure environment. It's the App Store model that I think we're going to see we we saw Glimpses of that last week at sapphire again. It's early days, but I think this is going to move very fast Do you think there'll be an Apple App Store for the enterprise or a version of it that won't be Apple? I think very clearly We saw last week SAP strategy is to be the platform provider for the enterprise App Store I think you know once Oracle is going to copy that playbook I think IBM will be looking at that seriously, but right now I have to say John I was impressed with what I saw with SAP. They've got the technologies. They they've got the vision They've got the focus and I think they've got an early lead there now whether or not they can transition their legacy base or In fact, I think you're going to see the the Apple iTunes App Store You know host a lot of these applications for small and mid-sized businesses. What's interesting to me is I think Citrix could make A run at Microsoft so you know if you look at if you think about what they're doing the hundred million people touch Citrix They support over a billion devices with with Citrix receiver a product that has grown Significantly for them been a big part of their edge edge solutions They support a hundred and forty nine smartphones and 37 different tablets Citrix has been a pioneer on the desktop for ten years. The question is are they over educated? Are they ahead of the puck? Are they there in the right spot? What do you think of that? I mean, I see they have the legacy knowledge and and with all this massive change happening right now in this theater Do you think Citrix has too much baggage or they position properly for capturing this transformation in the industry? Well, I think Citrix, you know largely has flown under the radar and has gotten a Critical mass as a result of that. I mean regarding Microsoft Microsoft Obviously says some huge advantages not the least of which is its massive install base and its ability to play games with Licensing, I mean if Microsoft wanted desktop virtualization to take off a conflict of licensing switch And everybody would be doing desktop virtualization and Azure Microsoft's, you know development platform in the cloud I think it's also, you know a big investment that Microsoft's making appealing to developers and I that that's a that's a Big roadblock for Citrix to overcome so I think Citrix has to play nice with Microsoft. It's doing a good job of that You know Brian Madden wrote an article recently that He called Citrix hotel art, you know not meant to offend right and Citrix does a good job of not offending Microsoft I think they had mine. They might have to some point. Okay, so the next question I have for you Dave is obviously Citrix very sexy messaging around having things on the laptop I mean a nope. I mean, I mean an iPad and a mobile phone I love that message give my applications anywhere my work stuff seems to all my problems go away The reality is in the enterprise with all this consumerization going on There are some people who own that Cisco HP people at the networking layer people who own the networks own the conversion Networkings They're kind of at the top of the stack. So the question is how well can they play in the trenches of some of these hardened You know in technologies where Moore's law has kind of kicked in well, you mentioned Cisco You mentioned HP. I mean those are big partners of Citrix, right at least for now and good partners of Citrix And so they're working together, you know, I think the key is Citrix has to get desktop virtualization mainstream and it's not mainstream today. Why is it not mainstream? It's just not appropriate for a lot of use cases a lot of industries and a lot of applications The economics aren't necessarily there the promise is there and it's great in certain Narrow what I'll call narrow use cases and industries. I mentioned financial services health care government Education those are the guys that are taking up desktop virtualization and really glomming on to it And you're starting to see larger installations But again still you're talking about 50 installations worldwide of 10,000 licenses or more You know, it's not ubiquitous yet And the challenge for Citrix is to make that go mainstream and again Storage is one of the big barriers storage for for for desktop virtualization is a major bummer right now So and what's the answer for that? I mean obviously storage is a bottleneck We had xyotech on they're talking about the you know, they had 7.5 terabytes in that little casing We showed it to the camera they popped up like 400 people who started watching a little gadget porn there for the Tech geeks out there, but what is the main bottleneck and storage? Why why isn't it advancing fast enough? I mean fusion IO, which we've been covering you've been doing deep analysis on it's going public I see they make solid-state memory a solid-state drives What's your angle on the storage impact? With the with a billion PCs out there, however many it is all those devices think about the way in which we as Individuals use storage. We're constantly pulling up files. We're writing files a lot of IO activity It's our own little Storage farm, but it's distributed. So there's no real choke point on my little mini network there When you all of a sudden start to centralize that and you do a VDI implementation or desktop, you know virtualization It becomes an IO blender John So the the workload patterns for desktop virtualization are completely different for example than server virtualization So as we all know Server virtualization broke storage and and this the solution to server virtualization is not the solution for desktop virtualization So you need to tune storage and design storage and architect storage Specifically for desktop virtualization and I presume that's what xio tech was talking about you got a size the workload You got to understand the read write pattern a lot of right activity in desktop virtualization versus server virtualization So two different worlds and I think the storage world that frankly has not done a great job of architecting storage for VDI and desktop virtualization I know and one of the things I know that xio tech is doing is stripping out a lot of the complexity really making Making it very hardware focused and making it simple dumbed-down DAS like storage super fast Really allowing the applications to do it do their job So I think it's really a new way of thinking is required and then you mentioned fusion IO I think flash plays a big part of this especially when you have bootstorms right when everybody comes in the morning at 9 o'clock Logs on an email or everybody comes back from lunch. It's not a problem with an individual desktop It's a huge problem when you have a thousand clients or 10,000 clients banging away on an email system I'm John Furrier with silicon angle calm the worldwide leader in emerging tech innovation and I'm Dave Vellante of wikibon.org The open-source research advisory firm this is the cube our flagship teleclass where we go to events Explore the smart nodes all the smartest leaders and executives with thought leaders Customers extract that signal from the noise and bring it and share it to you sharing his power and we are on our summer tour 2011 where we go to all the events two weeks ago at EMC world in Las Vegas last week We were in Orlando, Florida for SAP sapphire and for this week We are live in San Francisco, California at Moscone West with Citrix synergy Dave. What is the theme? From EMC world and sapphire that you see here so far. I mean you just got the plane But you know we talked before you got here kind of kind of has sense of it But take us through the past two weeks. We're at EMC world in Las Vegas I see big storage vendor transforming their business and growing like crazy SAP sapphire last week. What's your kind of boo-doo? What do you think is happening here? So the emc world of course it was all about cloud meets big data and The cloud is the one theme that we've seen from emc world to sapphire now at synergy the big data theme at emc world emc basically Announcing it's doing its own Hadoop distribution elbowing its way into the open-source community having a data scientist summit Announcing things like you know a vision to our data scientists training really doing some great marketing there But really cloud VM where private cloud going to hybrid cloud It increasingly via VM where licking its chops John Simon Crosby would love this on the public cloud then at sapphire We heard I think a much more mainstream message around mobile mobile computing We did not hear that at emc world and not surprisingly But I think increasingly emc has to start thinking about you know that trend and we heard it loud and clear at at sapphire It was really two main things Mobile applications and the whole new application app store for the enterprise and Hanna in memory computing not necessarily big data But fast data, so certainly there's a lot of big data However, you define that but fast data is really what SAP's message is about doing things in real time or near real time And here we're seeing the confluence of consumerization of IT Cloud and mobile which brings a simplification theme which we saw at all three events And a very strong mobile theme which we saw at sapphire and of course cloud Obviously mobile is a big theme at SAP here. They're using the word desktop. I mean they keep on talking about desktop You know, I guess that's the art that won't offend as Brian Madden would say But the bottom line is you know the physics the notion of a physical desktop is old and it's dying and The idea of a desktop to me conjures up this image of like an IT worker sitting at their worker sitting at their desk Chained to a big fat bloated PC and I look at Apple. I see sleek. I see mobile I see soccer mom doing her work and you know father at his son's game I mean this is this is what we do and people are mobile and we want that real-time experience So to me I wonder how they're going to get desktop virtualization to the mainstream as and the second Question I'm looking at Dave and this is where I want to get your opinion is you know talk about being a fabric Everyone wants to have a fabric. We're gonna be the the network fabric that ties it together That's hard stuff to do and this and the question is can they do it and provide the solution? So, you know, we are in an era of Consultancies as we talk about services angle what roadmaps are they providing their customers? What proof points? What reference architectures? How do they accelerate the success of their of their customer base to me? That's what I want to know. Well, yeah, I think you're right about desktop the marketing thus far around Desktop has been big D little D little D implying Mobile, but it doesn't do it for me. John. I'm sorry the desktop term is just outdated Everybody talks about we're moving beyond the PC era. Well, let's move beyond the PC era John, let's let's agree to coin a new term this week. Okay, let's we come up with it Oh, I'm fast jeta last time, but no, but seriously the desktop's gotta get gotta go So it's a gotta go right now on the second point you're making about fabric Everybody as you're right is talking about new fabric right wants to be the fabric player whether it's Cisco Brocade Juniper Citrix obviously big networking or growing networking business Here's the thing with the cloud. We're seeing a flattening of the network hierarchy and maybe it is jump ball and networking You know, we're seeing Cisco we're seeing cracks in the Cisco armor But but Cisco's aware of that trying to get out, you know from from underneath that Get ahead of its skis as opposed to behind it right now So the flattening of the network everybody wants that is it jump ball and then your last point about services I think it's a really good one. We saw last week at sapphire SAP a company Where services companies have lived off of complexity for decades business process re-engineering ERP enterprise resource planning consultants like Accenture and CSC and IBM or PWC before them and many many others Fujitsu etc have lived off of that complexity of SAP and we're seeing that transition to cloud to mobile to simplicity That's a big opportunity for services company, but it's also very disruptive to them And it also it's combined with this whole new cloud service provider space So we saw cloud rack space recently announced desktop virtualization solutions right now that you see in cloud service Providers offer internet class services highly disrupted for the traditional services companies So big opportunity, but big disruption going on so the question is how do they get provide cloud? What okay first of what is a cloud provider? We heard at VMworld on online service providers are now cloud providers Is a cloud provider a startup is it an enterprise themselves? Is it live rise in business? Is it terror mark? I mean, you know, what is a cloud service provider one and two if everyone's focused on the development side If these stacks are not built out and there's still a moving train How can you deploy consultantly services around it? Yeah, well, so I think you're absolutely right I mean the need for consulting and services remains to me John the cloud provider is not Is not the web hosting company To me the cloud provider is not the web hosting company right It's the it's the new model of an elastic compute model that that Amazon really popularized in the early 2000s or mid 2000s a lot of companies doing putting lipstick on a pig saying oh, yeah We're cloud to and it's really web hosting okay You can have package number one or package number two and package number three. Well, I just want more compute. Well, sorry That's package number three. That's not cloud to me So cloud is about on-demand elasticity being able to turn the knob dial up or dial down Whatever resource I want with a great deal of granularity not necessarily infinite granularity, but with a great deal of granularity That's what I consider true cloud service providers I do think the consulting opportunity is how do I change my business not just my it organization But my business to transition to the cloud and that's where the consulting opportunities Well, we heard we heard last week at Sapphire SAP show agility was the number one reason people wanted to do cloud anything mobile software and cloud so so Agility how does Citrix play into this Citrix equation? I mean Agility their virtualization company Well, I think a lot of the marketing is a bit ahead of the the reality because when you talk to CIOs They're still looking at cloud as a way to save big bucks and as we heard from from Siki Junta last week who's a very articulate practitioner from CSC you could save 30 to 40 percent by deploying in the cloud if You deploy the right applications and you do do some planning So I think we're still in the cost-cutting efficiency mode and and and visionaries Want want to talk about the agility piece now? Very clearly that's the case for a lot of the the web startups But for a lot of the traditional businesses We're still taking cost out of the equation and agility is you know a close second And I think ultimately is going to flip the equation. It has to flip the equation We can't just keep Justifying things based on cutting cost is going to be nothing left left to cut so I do think the marketing is right It's just that the the the market has to catch up to the marketing What do you think of Citrix as compared to VMware? I mean, I see we're at Citrix synergy Again, it's only our first night to kick off people are really partying kind of hanging out going to do in the booth Checking out the booths, but I mean relative to VMware. How would you rank? Citrix against everybody else too. I mean the relative to all the market forces Are they well positioned? Are they like throwing the Hail Marys? I think they are two different companies I mean, they are definitely competitive and they're competitive because because VMware covets what Citrix has which is that Really strong base of desktop virtualization. That's really where Citrix shines and VMware doesn't VMware is on At least it's second or third, you know as they called it before a do-over of VDI and it's really trying to find the right formula It's turning knobs. It's very Microsoft like John. We're at the version 1.0. Oh, that didn't work Let's do a version 2.0. Oh, I didn't quite work 3.0 is gonna be really good Citrix there is there I think Citrix is the gold standard for desktop virtualization I've been doing it for 10 years. So these guys have been around but the question is I wonder if they have too much baggage Ten years doing one thing. They're in essence an incumbent in this area Can they truly change and be nimble enough as a company to really do well and be innovative? Can they truly be innovative? Can they do the open-source stuff still make money? Can they get the developers on board and can they deliver the solutions fast enough to me? That's the fundamental question with Citrix. I think they're well positioned. I think that the triple threat around Citrix is real I think the opportunity of the triple threat of personal, you know social web Private cloud and public cloud is all real and if I was if I was in working in the marketing department Citrix I would get rid of desktop Get rid of that term tell Microsoft forget about it. We're getting rid of the term. We're gonna call it mobile Just call it mobile because that's what people want. They want mobility as a consumer in the IT environment I want to have true mobility. I want access to my apps. That is not about a desktop. That's more about being on the run That's about real-time web and I got to tell you SAP nailed it last week. Their messaging was so rock solid I was solely impressed with them. They talked about mobile They even downplayed big data which is the big true big hype horse to ride these days So they talked about big data, but it wasn't really the central theme what you coined as fast data They that's not their term. That's should be their term. That was your term But that was a very perceptive on your part and it really was what SAP was talking about, you know as far as Citrix goes I think it can John, you know, yes, maybe it's because it's got a legacy base But but really the legacy base is really around, you know access, right? And that's what desktop virtualization or mobile virtualization whatever we're calling it is all about its access from to Applications from anywhere and they've done a good job of that It reminds me John of the Cognoses and the sasses of the world. You remember it used to be called decision support systems It was really boring kind of slow growth no growth market And then all of a sudden exploded and now, you know, you had a run on companies like Cognos and you had a lot of acquisitions, but but we got a comment. I got I got a private message on Simon Crosby's comment about Hey, Zen is the only mega cloud solution deployed any 10k deployments on VMware out there I got a message from someone said based upon what Joe Tucci presented at the analyst briefing where I was at in London He said Mosey is bigger than EC2 and other petabyte scale clients Wouldn't be there without VMware so to cross these point There's a proof points on the EMC side. That's our VMware side EMC side that Mosey is Bigger than EC2 You know, this is an interesting or I should say s3. It's an interesting discussion. Here's the thing I'll make an observation VMware thus far has really been about the private cloud server virtualization with it within the four walls of companies or within the virtual walls of companies, right? and And and and Zen and Citrix have been providers of the public cloud when you think of the public cloud I think of really a single application Facebook Serving, you know hundreds of millions of users when I think of the private cloud VMware's business I think of hundreds or thousands of applications Servicing thousands or ten thousands of users really two different ballgames So VMware's challenge is how do I take that discipline of virtualization in the in the in the enterprise that private cloud? And make it hybrid or make it public at public scale VMware really has to prove that it can do that and you know, maybe there are a few proof points out there I don't consider Mosey one of them. I mean Mosey is basically a company that does, you know desktop backup You know nice company nice products But and tons of storage right more than easy more than s3 as we heard But I think we're talking apples and oranges there when we talk about the scale that Simon Crosby is talking about I want to see VMware stand up and say yes, we've got deployments as a large at scale hybrid cloud public cloud Virtualized desktop. Here's the here's the million dollar billion dollar question for you in the light of the PlayStation hack costing the company billions of dollars RSA got hacked Amazon crashed all kinds of weird, you know, what's happening on the web Security is a huge issue Pat Gelsinger at EMC said securities to do over I asked Simon Crosby the same question And he said security is a do-over he said the old security paradigms of chasing the bad guys are is over And that McAfee semantic of their toast So the you know the question that needs to be discussed is if peace people gonna be moving their business over to vet desktop virtualization What what the hell's gonna happen on the security side? What is the security model? We talked about this at Sapphire any any Changes in your views on security. Yeah, I mean the historically Security has been achieved by building Offense around physical resources, so I know that adapter a goes to controller B goes to storage device C Goes to server D. Whatever it is I know that path and I can secure and harden each of those resources, so think of The Queen the Queen's in a castle you dig a moat around the castle to protect the Queen Along comes virtualization and the Queen wants to leave her castle So when the Queen leaves her castle, you don't know where she's going a lot of virtual machines They just put a a brick wall around the Queen Okay, and so It's very hard Fundamentally security practitioners that we talked to in the wikibon community don't know how to solve that in the middle problem We call it. They you know the edge. Okay fine You can you could do the endpoints, but it's all that stuff in the middle with multi-tenancy that is really really tricky What do you think about the the investment in IT Dave? I mean obviously we're talking about an IT recovery. We're talking about an economic boom Okay, we're seeing an economic upswing that is fueling innovation entrepreneurship IT refreshes I mean IT has been a dead Horrible landscape over the past 10 years now all sudden boom massive change server virtualization desktop virtualization Really fast networks application development very rapid things like OpenStack that they're promoting here Means the developers dream I can I can deploy in the cloud what I couldn't do five years ago And this is this is what's driving the entrepreneurship. How is this IT economy? Changing and what does that mean for CIOs? I mean, you know, you ran you used to run a CIO consultancy What is your view on that? I mean you've an opinion I do I actually think that's a very interesting comment that you just made that for the last 10 years IT has been a dead industry and and I was gonna debate that but I want to I want to make an observation Why 2k was the peak right? I mean that was like the boondoggle and then obviously we saw a dip after why 2k and The market came back But to your point the market came back largely around things like compliance You know and Ron blew up right you had a lot of reporting and and you're right There hasn't been a lot of innovation the IPO market has been very stagnant along comes web 2.0 Along comes big data along comes cloud and you're seeing this Massive innovation a lot of people are calling it a bubble the difference is this time around you're seeing real profits and you're seeing the The companies that that made it through the dot-com bubble are wildly profitable Companies like Google for example and frankly even the you know the e-bays of the world have a very viable business Even though they're going through some transitions, so we're seeing massive disruptions tremendous opportunity new entrants like EMC of all people which is just shocking to me and then all these public cloud guys John The public cloud versus the so-called private cloud guys There's like two different industries one is you know really based on a lot of legacy apps and Legacy infrastructure and the other one is exploding. It's like the old PC days I'm not so sure those two industries are going to come come together anytime soon I think all the innovation is happening in the in the consumer side in the public cloud side I mean I think I mean first of all my observation on that first of all great conversation here a lot of things that the Observations that I see Dave happening right now is that there are two forces That really didn't exist in the web 1.0 world with the search world or the bubble world or even in IT And that is people and data they existed the people the person the people and data existed But it was a passive relationship to technology People have were users you're a user. I mean hell. I'm a heroin user. What you know user was a term quite frankly It's a bad term they use something so they were passively involved and there was a monum You know mono direction no mono, you know monologue between the the computer and the user And then data was stored owned by the enterprise and we didn't really have a mobile environment Everything was done, you know in person but now with the web and the way it's architected now the the people and the data are now integral parts of The technology the computing and the data so those two forces alone changed the game on Collaboration they changed the game on mobility now the user the user the consumer Has a part of it so I think the term user is dead I mean I've always been a negative been negative on the word user we have users we have consumers So you know the consumer is active these consumers contributing whether it's open source on the developer side or Providing data on the mobility side downloading apps and then the data is much more strategic fast data Integrating into the applications real-time analytics those two forces are changing the business and we haven't seen that before So I'm really excited about that Dave those are two two things and and we're I was saying earlier We're in a user experience Computing market the user experience is at the center of it all the data the people the relationships So I think that's the common theme that I'm seeing come from sapphire in particular and this show Well, we talk about data a lot. We use data in our business We've got you know what we would consider I guess data scientists, right on staff doing some interesting things I mean it really is becoming a data and information driven wave But I got a question for you John. I want to speculate a little bit about Citrix Who's gonna buy Citrix? Why doesn't Microsoft just take Citrix out? 20 billion gets it done What do you think? I don't know. Hold on. Let me check. Let me check my data dashboard here I have a list of acquisition targets for Citrix So I think Citrix We got a little I got some data coming in off my Skype client IBM brought Watson here and they're playing against him. They're looking for challengers what Jeopardy or chess? Jeopardy tech Jeopardy That's not chess we could get David Fleur up here David Fleur say it was a Teenage European Grand champion You know junior champion. Yes very very accomplished chess player I Don't think he could beat deep blue though if Gary Kasparov couldn't do it So I don't know I mean Seems to me John 20 billion gets it done right there $15 billion market cap $2 billion company so training at seven and a half times revenue. It's a little rich But why not? Great asset Microsoft needs mobile Okay, I'm checking a very unique company, right? It's not like there's a ton of these guys out there Right, I mean, I'm gonna just double check my little Citrix stay independent. Can it stay acquisition proof? And how? How does it do that? You asked me at SAP sapphire if Who was it would be bought? No, was it EMC? you asked me if Net app would be bought yeah, we were talking about and I said no and then I started thinking net app net app and Citrix have a low enough market cap where I could see them getting swallowed up in a mega merger Don't you see don't you think we're gonna start seeing mega deals like that? I think you're gonna see the member back in the 80s the junk bond craze and you know companies were merging KKR KKR, I mean which by the way Marius Haas just went to KKR. Yeah I mean he's a corp made to be the big core of the Cisco that the compact you my Predict my prediction is we are gonna see a massive M&A market Billions and billions of dollars not a billion dollars here or eight billion dollars there 20 to 40 billion dollar acquisitions coming down Consolidating these big monsters together Microsoft Citrix could be a possible one Cisco EMC Cisco EMC net app Citrix You know net app oracle I think net apps and play I mean I don't know a lot of market forces are there But again, we love to speculate on this scares me because with the LinkedIn IPO That would totally be very enron is Microsoft Facebook scare the hell about that Microsoft Facebook look look at let's not Out of the question. I wouldn't look at that other question. I could see Facebook buying Microsoft I didn't say who's gonna buy or merging now Bing the Bing search engine Integrated Facebook in a very deep way if you look at the new Making traction if you look at the Bing refresh what just happened last week go to Bing comm and check out the search results You'll see it's very deep integration to Microsoft. I mean to Facebook. So, you know, that's one sign So what I would do if I was Microsoft is I'd go roll up the drop boxes of the world Get into this market. They got Skype. I would say drop box is a very big acquisition target right now We've been hearing about them especially with the iPad implement use case. You don't need thumb drives anymore I use drop box on the cloud drop box is a very interesting proposition great Net box dot drop box has a great freemium model, right? You get two gigabytes for free and then you move up Dave Cahill on wikibon just wrote an analysis and the title of the piece was something to the effect of carbonites the economics of Carbonite or lack thereof Okay, basically what he's saying is that carbonite spends more money acquiring customers than it makes on those customers So they're three-year lifecycle. They lose money now Maybe they have a long-term customer retention model that that's attractive, but drop box has a great model Much less it's because it's viral. So that freemium model is very effective. So I a lot of people talking about drop box Great utility there box net is another one that you mentioned growing like crazy Whitney tidmarsh we had her on she's great Okay, we're here live in San Francisco, California at Citrix synergy Huge trade show. I'm John Furrier the founder of Silicon angle comm and Silicon angle dot TV And I'm Dave Vellante wikibon dot org and we're here at Citrix synergy the worldwide leader silicon angle comm Silicon angle TV the worldwide leader in tech coverage Citrix synergy is ground zero right now for a massive trend that everyone's talking about virtualization desktop virtualization Not a lot of people know how successful Citrix has been they have a couple products that people use every day Citrix Go to meeting go to PC for virtualization. They've touched 100 million users Just some stats on they have they have Stats on Citrix hundred million people touch Citrix with their applications two of the top ten apps on the Apple App Store is Citrix top five softwares of service businesses run on the Citrix Citrix is one of those silent major players that power the virtualization market without Citrix Amazon comm would not exist and without Amazon comm you wouldn't see things like Zynga group on Facebook all these new technologies that are out there were enabled and innovated by Zen virtualization Zen Source all the key to all this has been open source Virtualization and now Citrix in the desktop space for over ten years granted legacy is evolving and transforming Dave with virtualization So again without Citrix there would be no Amazon comm and John just add a little more color to that We're talking about a two billion dollar company with a fifteen billion dollar market cap And one point six billion in cash on the balance sheet throws off a lot of cash You got twenty three percent operating margins threw off a hundred and fifty million dollars in cash last last quarter It's a growing company. It's got a strong foothold in the market trying to make Desktop virtualization go mainstream. I would totally stock up on this stock that ticker symbol is CTXS I think they're undervalued at fifteen billion dollars just to make quote trend riding the trend wave Absolutely worth more than LinkedIn. Okay, so, you know, if you want to stop to buy June, don't buy LinkedIn buy Citrix Yeah, what do you think of the LinkedIn IPO? I mean totally overhyped Henry Bloggia from Business Insider called it absolute pump and dump Yeah, the bankers people were calling me the day before so you got to get your hands on that LinkedIn IP I said I wouldn't touch it. I mean, it's gonna rock it up the little guy gets screwed He'll maybe make 10% on day one and I just don't see it. I mean, okay Hold on. Let me after I just skeered them from the pump and dump scam, which they did I will say that I'm bullish on LinkedIn. I mean, I like LinkedIn. They're a startup That's like six seven years old. They grind it it out got venture funding. They bolt up They have really valuable user base. The data that they have is significant and I'm bullish on their opportunity But it is absolutely risky. I do not see them at a ten billion dollar company. I think there's a ton of risk I think the management team is solid. I think the execution potential is there to be worth a very big company But absolutely today, they are a very solid company great management team But the future value of what they're being valued on today is still risky not worth the valuation I love LinkedIn as a tool. I mean and we're not we don't pick stocks John and I aren't stock analysts But we love to speculate don't we but what does that say to you that LinkedIn rocketed the way it did What does it say to you? What's it's what's the market telling us? Well, first of all, first of all It's exciting from I live in Silicon Valley in Palo Alto Palo Alto is my playground Entrepreneurships are there VCs are there entrepreneurs are there. It's great. It's a good. It's a good outcome to see liquidity Yeah, the bankers did a little reach around on LinkedIn on there I see that but the the issue is this is an opening of a market where there's liquidity and I think that's great news for the Economy I think it points directly to what I see is the next big wave of liquidity. That's on the IT side I think we're gonna go through a massive Renaissance of IT refresh. We're gonna see massive money flow into the sector The Citrix show here is gonna create massive wealth creation for people who have jobs entrepreneurs So LinkedIn telegraphs to me that the tech business is back People are experiencing firsthand the technology that to me was created by the internet and then it's solidified by Apple Computer with the the kind of consumer technology that wasn't Clougie hate to say it. It wasn't like Microsoft is is LinkedIn worth $9 billion in your opinion. Yeah, so Discounted future cash flows yet, so but I could tell you right now. I would not buy that stock. Well, you mentioned liquidity It's a it's a small float on that stock So there's not a lot of shares outstanding and there's there not a lot of options out there How many you know social networking companies can you buy shares of I think there's nothing else out there with the LinkedIn What the LinkedIn IPO tells me Dave is that there is huge demand for tech stocks that are emerging So it's an emerging beacon for me It says hey, you know what if LinkedIn can go public and go surge at that level Fusion IO Zynga announced today Kara Schwisher on all things deep exclusive story. She broke Zynga is going public That's the deal Zynga is growing like crazy. They are absolutely crushing it and then you know if you look at LinkedIn versus Zynga, there's just no other new products in the market. So the the average consumer who's buying stocks thinks oh LinkedIn I use LinkedIn. That's an emerging technology, which really it isn't but there's no other products out there So Fusion IO, I expect that to be a massive IPO if LinkedIn is a is an indicator of the market Certainly Fusion IO is going to go right off the shelf. Well, go massively north Fusion IO is powering those types of firms right and it's power powering these web 2o companies these social media firms Groupon is going to go public next they're going to line up man like airplane So once the IPO market opens up, I'm going to see a massive tsunami of people start lining up The investment bankers are going to get rich entrepreneurs are going to get rich and that's good I think LinkedIn is good that these guys got wealthy. I think Reid Hoffman is a great entrepreneur And I think you know that kind of success Getting you know, the wealth creation is what Silicon Valley and entrepreneurs all about I think that's a good thing and you know Proves in the pudding they have a good story. They have a lot of data They have to morph from a Rolodex Networking tool to a data platform. What's different about this bubble if we can call it that from the last one talk about it I think the bubble here is about just the lack of real Public companies in the market so on the public side I just say that like I said before just that's not enough product on the market the difference on the private market where you have Companies getting funded is and I was just talking to Simon Crosby about this before we went on was that they can get funded for a half A million dollars or a million dollars or five million dollars use cloud use open source and get to five ten Twenty million dollar runway group on Zynga and once you hit those Valuations in terms of revenue growth or even projected revenues you're validated so you can go right you know Go right to a massive financing and where you don't have to sell a boatload of the company to that investors So that's a major trend. So those companies that are being valued have real revenue So unlike the last bubble there's real revenue behind it. The difference is there's no second There's no real public market to trade these stocks So you're seeing a lot of bubble activity amongst the venture community to jockey for position for these big deals And that's why you see the big names like Sequoia No NEA Excel benchmark throwing huge valuations at these companies because they want to just get rid of the angel investors and take over the good deals because That VC who has a 200 million dollar fund. They're going out of business Basically couple other differences is you know the the last bubble it was it was really VC money changing hands Wasn't it you had comms advertising with comms and and buying infrastructure from the likes of net app and EMC and really running up, you know, just basically artificially, you know meeting demand And the other difference is you got way more users on the internet spending much more time You got real consumers. So the advertising that's going on on the internet is is real just pick up any magazine You know, and look at how thin it is. I mean other than vogue, right? And and and some of those other magazines, but look at the tech pubs tech pubs are like this They're so media Dave media is dying. We heard from people that come on the cube We're here at the cube as sick to synergy you look around. You know, we're on the ground with a mobile HD studio three cameras We're changing media. We're not we're not CNBC. We're more like ESPN in 1980 Well, you heard what Sanjay Poonan said from SAP president of SAP go-to-market. He said this is the future of media Yeah, I mean we want to go in-depth conversations. We're broadcasting live from the ground floor at Citrix synergy the trade show for Citrix This is Silicon angle comm. I'm John Furrier and I'm Dave Vellante of wikibon.org and we're here We are a number one worldwide leader in tech coverage Citrix synergy is in Moscone center in San Francisco, California and Dave the energy here is high We got a lot of activity going on and this is just a kickoff. It's opening night We're gonna go in-depth with interviews from all the top executives. We just had Simon Crosby on we have a slew of others and We're gonna come right back I'll let you comment on what your opinions are real quick. Yeah, so We're here at Moscone West a lot smaller venue than Where VM world is held at the the main Moscone Center? And so I think we're talking about a show of thousands here 1200 maybe 1500 and You know I'm looking out here at the at the exhibit hall Wise obviously has a big presence here right as the a thin client provider Of course Citrix is a is a is a big big presence HP is a big partner of Citrix Absence Splunk some of the new emerging companies that we see here So it's quite a scene just getting started. We've got Tuesday Wednesday Thursday Friday is the event We'll be covering tonight. We're going till 10 30 Pacific time We'll be all day tomorrow on Wednesday and Thursday and We've got a great program for you this week a lot of guests from Citrix. We got some of the ecosystem coming by We got some service providers. We got some startups should be fun, John Yeah, I mean that the silk Silicon angle calm Dave is the reference point for emerging tech innovation That's my site. We have a lot of bloggers over there so for you all of viewers out there go to Silicon angle calm and get the Get informed on all the perspectives in tech innovation with a worldwide leader in tech innovation Silicon angle TVs where we put all our videos Silicon angle TV is a new video site where we're like the ESPN of 1980 We're like the covering tech in depth 24-7 and the cube is our flagship product We cover news at events analysis and opinions. We bring interviews with thought leaders and bring them to you We're excited to be here in San Francisco, California at the Moscone Center for Citrix synergy and Dave You know, I gotta tell you the the interesting thing here is that the one of the themes that keeps coming up over and over again and for The folks out there who don't understand the IT enterprise corporate tech market It's changed over the past ten years, but this year is the year of the consumerization of IT What that basically means is you get to use your iPhone or Android phone Anywhere and not have to worry about IT corporate policies because in the old world You go to work and you get chained to a desk desk somewhere they cut off Facebook. They cut off YouTube You can't play games. You can't check sports scores. You'd like totally like it in jail Okay, you got to use the company phone. You're sneaking in your iPad. That's all going away You basically can go to work from any location on any device use any application That's the preferred future and these vendors like Citrix are trying to drive you there So yeah, that's a major major step in the right direction I think the trend spotters saw this early on you obviously been talking about consumerization of IT for a long time My friend Dave Michela first mentioned the term to me in 2005 and we're now seeing CIOs Really driving hard within their organizations. It's all about simplicity You know the IT industry is gonna is changed forever all that complexity and enterprise applications It's got to go John. I got a question that came over my my Twitter direct message It says you're you were talking about this bubble and how valuations are getting where they are What about some people are saying about valuations being tied to the Fed interest rates And how are they effectively at zero and that's driving the valuations? Yeah, well the answer there is money is easy right now and easy money means people are gonna raise money They're gonna increase their balance sheets. Google just did a financing right did a bond raised money And what does that mean? That means they're gonna bulk up on their balance sheets That means you're gonna be able to acquire more companies the price of those companies goes up And that's what creates this for off the effect So the effect of easy money is is it's a good question is no no doubt that it's fueling some of the front for me I mean, I really can't comment on the interest rates. I'm not an economist But the bottom line is you know people follow the money and money follows opportunity And when there's when they when the system gets tweaked by interest rates Which essentially is a big lever on how money is going to flow it moves to investments And some investments will be certain asset classes housing bubble crashed now venture capital has been an asset class Start up certain asset class. So basically money follows opportunity And so the bubble is all about racing. So what you see in the tech business is the me to investing So what I get cautious of is the me to investing where you go in you say, oh, I got to have a social network I need a photo-sharing application because someone else got it When people start investing at that level when you start to see me to you know a mono culture of like investments You got to run for the hills because the best investments are the ones that nobody sees It's the ones that everyone hates No one liked Facebook. No one liked Twitter. No one liked the best deals. It's so funny So when you look at the investment cycle, you got to look at what conventional wisdom is doing the herd or You go with where the smart money is so to me The angels and the early-stage investors to me in Silicon Valley of the smart money the higher-end firms become asset class managers And I think they're gonna try to control the big deals We're here on the ground in San Francisco, California. I'm John Furrier the founder of silicon angle comms looking of that TV We're located Palo Alto, California. We are on the ground at Citrix synergy covering all the tech trends inside the