How will you package and offer other Citrix products with the XenSource product? Do you intend to offer a suite of products like VMware's Infrastructure 3? We are going to be using the XenSource product in combination with some existing products. Whether the packaging ends up being a suite or how else it's offered, we have not finalized the details on at this time. Looking at specific areas of growth -- where is Citrix focusing now...
that you've acquired the XenSource product? As it relates to interaction with Citrix in integration or working with other Citrix products, there are two primary areas that are of high interest to us.
One is with Citrix Presentation Server and virtualizing servers on which Citrix Presentation Server runs. So I foresee that we will do some promotions around that because that's a natural fit that we will pursue.
The other hot trend is desktop virtualization. We've been doing application virtualization for a long time, and even desktop virtualization using Citrix Presentation Server. Now the trend is moving toward serving desktops. One solution that has been used for serving desktops is our desktop server product, connected to VMware's back end. It is just natural to connect our desktop server product with XenSource as the back end and [give] customers the choice of one over the other. So you don't intend to replace VMware with XenSource? A customer could use both?
A person could use both. The intent is just to have it as an option. Ultimately, we trust the channel to drive those decisions.
What we foresee in terms of application delivery is [that] customers will always have mixed solutions. You always have specific individuals at an organization that want to use a typical desktop PC; you'll have individuals for whom a blade PC is the right solution; you'll have individuals for whom a virtual machine is the right one; and you'll have Citrix Presentation Server customers. Depending on the organization, depending on the actual users of the technology, the right choice may vary.
The benefits we have are that Citrix has nearly 200,000 customers. VMware is undoubtedly the No. 1 player in the virtualization market, but there's more than enough room for multiple companies to be successful in that space. How can resellers make money selling XenSource?
For XenSource we are providing the same kind of profitable business growth opportunities that our channel partners have had with the rest of the Citrix product line in the past. The Advisory Rewards program that we have, we are going to adapt that program for the XenSource product.
Depending on deal size -- or if a reseller registers a deal -- resellers can make anywhere from 5% to 10%. That's 5% or 10% on the suggested retail price (SRP). We do run additional promotions for specific products, so for example this year, we've had an additional 5% bonus on the networking products.
When you think about the networking products in this example, [resellers] could be making the 10% on the deal plus the 5% bonus and -- because it's on SRP -- once you factor in any discounts that the channel may have had, they could be making 20% or 22%. That's actually very profitable for that space. What are the main areas you'll focus on while you're developing a channel program around XenSource?
What we are trying to do is build a sales model that encourages the channel to sign up for XenSource.
So No. 1, we've been designing the right sales model. No. 2 is hiring the right people that have the right channel background; No. 3 is making sure that those people are focused on channel training and enablement; and No. 4 is developing a certification and authorization process that a partner has to go through to make sure that they understand the technology, that they can sell it effectively, and that they can implement it effectively for customers so that they can be successful.
Right now the way our sales team is organized, we have the core Citrix product team and there are [groups of] networking specialists focused on the networking products. Now what we are adding are server virtualization specialists to focus on the XenSource server virtualization piece. Will the new sales team be selling XenSource direct or will they be generating leads for the channel partners?
It will be very similar to our current model where the field team works with the channel to drive opportunities. We'll have a very strong core of inside sales that will be doing a lot of the demand generation and funneling those leads to the channel.