Intriguing Equation

2:45 PM -- Citrix Systems has made a move in the WAN/WAFS arena that considerably ups the ante for any vendor involved in this space. Today, Citrix said it has partnered with Microsoft to produce what Citrix calls a "new type of branch office appliance... based on Citrix WANScaler, Microsoft ISA Server and Microsoft Windows Server 2003 R2." (See Microsoft, Citrix Expand.)

WANScaler, you'll recall, is the WAN optimization gear Citrix just acquired through its purchase of Orbital Data for $50 million in cash. (See Citrix Grabs Orbital Data.) Within a month, Citrix has changed the shape of this emerging market.

The real whammo here is the deal with Redmond. From the looks of it, this isn't just a reseller or joint marketing agreement, but a full-tilt codevelopment pact with R&D backing from Microsoft, though the parties won't have a signed agreement until early next quarter and products aren't set to show until the second half of 2007.

Nonetheless, Microsoft hasn't thrown this much weight behind a remote site management product since its agreement with Tacit (now Packeteer) last year. (See Microsoft Gives Tacit Approval.) When that was announced, Tacit's advantage was thought to be its close integration with Microsoft software, compared with other WAFS vendors' heavy reliance on Linux.

The lesson? Microsoft is dead serious about the remote site market, to the extent that it's ready to do whatever it takes to create a single box that provides compression, quality of service, WAFS, Web caching, and security. Citrix is a current favorite in Microsoft's project, even if it doesn't wind up being the only one. Citrix's acquisition of Orbital appears to have hastened it into the winning spot.Meanwhile, the market regroups. Cisco, F5, Packeteer/Tacit, and Riverbed are shaping up to be major contenders and obvious competitors to Citrix. But Brocade's acquisition of McData (which had a major resale agreement with Packeteer), could affect things, as would an anticipated Riverbed IPO. And considering that Riverbed's in a "quiet period," that could be imminent. (See Riverbed Hedges IPO Bet.) Expect fireworks soon.

Mary Jander, Site Editor, Byte and Switch