Citrix Strengthens Cloud Foothold - Analyst Blog
July 13 2011 - 4:30AM
Zacks
Citrix Systems
Inc. (CTXS) has become a formidable player and has
solidified its foothold in the cloud computing businesses by taking
the route of acquisition. Yesterday, the company announced that it
has completed the acquisition of Cloud.com Inc., a leading
developer for software infrastructure platform for cloud computing
service providers. The financial terms of the deal are not yet
disclosed.
The CloudStack product suite of
Cloud.com offers an open-source platform-as-a-service environment
that enables the cloud service providers to deploy and manage
scalable applications in simplistic and cost-effective way.
Citrix is growing gradually as
virtualization and cloud computing becomes essential for large
enterprises to reduce costs when the economy begins to recover from
the recession. Telecom service providers coupled with several other
larger enterprises are at present relying more on third-party cloud
infrastructure to offer and access cloud services easily and
quickly. According to a research firm IDC, the cloud computing
infrastructure market size is expected to cross $11 billion by the
end of 2013.
With Cloud.com in its kitty, Citrix
is now comfortably placed at par with cloud computing software
leader VMware Inc. (VMW). Incidentally, VMware is
the closest competitor of Citrix. The company became a strong
challenger for Amazon.com Inc’s (AMZN) web
services software and Microsoft Corp.’s (MSFT)
Windows Azure software. Cloud.com has a solid list of clientele
including Tata Communications Ltd. (TCL),
KT Corp. (KT), Apple Inc. (AAPL),
Nokia Corp. (NOK), Zynga Inc., GoDaddy.Inc., to
name a few.
Virtualization and cloud computing
has become one of the most effective tool to reduce costs as
enterprises expanded in size. Instead of installing their own
virtualization and data center set up, the corporate bodies are now
sharing cloud computing platform of dedicated providers like
Citrix. As a consequence, the companies require the IT
infrastructure to support this virtual office. We believe large and
medium sized enterprises will increasingly move toward more dynamic
and converged infrastructure.
We maintain our long-term Neutral
recommendation on Citrix. Currently, it holds a short-term Zacks #3
Rank (Hold) on the stock.
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