Some interesting tidbits from a few recent financial conferences where David HenshallCitrix's CFO, presented:

At the Credit Suisse First Boston annual Technology Conference November 30, 2006:

  • BV Jagadeesh (former CEO of Netscaler) is moving to "more of an evangelical role" from his GM role for the Application Networking Group
  • The Western US Sales region has been responsible for about half of their Netscaler revenue
  • They are moving the Western regional sales VP into Jagadeesh's former GM role

At a Goldman Sachs Software and IT Services Conference on November 8, 2006:

  • WANScaler products (Orbital acquisition) will be launched in January 2007
  • Addressing channel partner adoption of WANScaler he said "It should be a lot easier to adopt than the Netscaler product."

What's to be made of this?  Here's my take:

  • In 6 months it will have been 2 years since Citrix acquired Netscaler.  It looks like BV Jagadeesh is positioning himself to move out of the company.  Not surprising and likely coincides with financial handcuffs coming off.
  • Concentration of sales in the Western US - this is consistent with what we've seen in the market.  Peel out a couple of key accounts and there are very few sales in other areas.  In their last earnings call they also said that there was essentially no Netscaler revenue for APAC and a little from EMEA.  It appears that broad adoption has been a challenge for them. 
  • Ever since making the Netscaler acquisiton, Citrix has been touting the leverage they would be able to achieve with their traditional channel partners.  From our observations, we believe that the majority of Netscaler revenue continues to come from the original Netscaler resellers, not the traditional Citrix channel partners.  Mr. Henshall's comment seems to confirm this.  I also think they will discover that the WANScaler adoption won't be "a lot easier".

Citrix's market share in the Application Delivery Controller space continues to hover between 7-8%.  I don't believe that this latest round of changes will materially improve their prospects to gain market share.