Citrix scoops up Orbital Data, users question future

This week's announcement that Citrix has bought Orbital Data to play in the WAN optimization space has users and analysts wondering what will come next.

Citrix Systems Inc. bought Orbital Data Corp. this week in a move that will bring Citrix into the bustling and somewhat crowded WAN optimization market.

The $50 million deal, both vendors said, will wrap Orbital Data's product line into Citrix's new WANScaler suite and round out its end-to-end application delivery strategy. WANScaler, coupled with Citrix's NetScaler, Access Gateway and Application Firewall products, will fall under the Citrix application networking group, which is based in San Jose, California.

The acquisition, which should be completed later this year, sent shockwaves of uncertainty through the Orbital Data user community and sparked questions about the WAN optimization vendor's future.

"I was certainly surprised by it," said Chris Majauckas, computer technology manager for Metrocorp Publications, the parent company of several metropolitan print publications, including Boston Magazine, Philly Magazine and Boston's Weekly Dig. Majauckas said the acquisition has left him with some unanswered questions, but it's too soon to hit the panic button.

Metrocorp recently deployed the Orbital 6000 WAN acceleration tool from Orbital Data to speed file transport between Philadelphia and Boston, namely to boost high-quality, pre-press printing jobs between the offices. With Orbital Data, Majauckas said, the company has seen a five-to-one compression ratio on print files, chopping print time from about an hour to six minutes, which he called a "huge" difference. The deployment is set to save the company roughly $375,000 per year.

"I don't think we're really going to know what's going to happen for some time," he said of Citrix's intention to buy Orbital Data. "If they take apart Orbital, it may not be good for customers."

Another unanswered question concerns the three-year support contract Metrocorp has with Orbital Data, which is already paid for. Majauckas said that he expects the contract to be honored by either Orbital Data or Citrix, depending on where the acquisition leads.

"As long as Orbital stays a company, it's not really a big deal," he said. "If they decide to change it, who knows."

Wes Wasson, vice president of marketing and product strategy in Citrix's application networking group, said users like Majauckas will continue to have the support they expect for their Orbital Data products.

"They're not going to see any immediate change," Wasson said. "Over time, it's going to get better for them."

Majauckas said he's been through acquisitions before with some of Metrocorp's other vendors. Sometimes the outcome is good, sometimes it's bad. Majauckas' best advice is to wait and see.

"Right now, I'm not too worried for the immediate future," he said. "But in six months, that may be a little different."

Currently, Metrocorp has no real need for Citrix products, but Majauckas said he can see how Citrix customers could benefit from the addition of WAN optimization tools. Overall, he was glad that Orbital Data was bought out and didn't fold for lack of funding.

Orbital Data has been in the WAN optimization business for about four years. The vendor's products boost the performance of data sent to branch and remote offices. According to Citrix, Orbital Data is the best solution to accelerate applications delivered by other Citrix products, such as the Citrix Presentation Server. In testing, Orbital Data improved the performance of Presentation Server by as much as five times, according to Citrix. The improvement was especially noticeable for remote printing and local file-save tasks that require the transfer of large volumes of data over the WAN, similar to what Majauckas and Metrocorp are doing.

According to the acquisition announcement, Citrix WANScaler will further accelerate client/server and Web applications delivered by Citrix Presentation Server and Citrix NetScaler to branch offices, making them run up to five times faster. The WANScaler line will also accelerate problematic applications to branch office workers by up to 50 times, including file-sharing apps and bulk data transfer apps. Lastly, WANScaler will improve Quality of Service (QoS) for such applications as voice and video.

The WAN optimization market has been a hotbed of activity in recent months, punctuated by several acquisitions and the rise of numerous startups. Big name vendors such as Cisco, Juniper and F5 have made major plays, while smaller vendors -- Certeon, Packeteer, Expand, Riverbed -- have honed their chops.

Citrix's Wasson added that Citrix wants to offer an end-to-end solution to deliver applications to any end user in any location. Adding in Orbital Data is a step in that direction, making WAN acceleration part of the application delivery infrastructure and moving it away from the network space and more into the application space.

Jason Needham, director of product marketing for F5 -- maker of the WANJet, a WAN optimization product -- said the acquisition and Citrix's subsequent jump into WAN optimization didn't come as much of a surprise.

"We expected it," he said. "It was something being talked about on the streets for a while."

Needham said Citrix's interest validates the WAN optimization market and the direction it is heading, with big players coming in and creating end-to-end solutions. Still, he said, acquiring Orbital Data was a way for Citrix to get a piece of an emerging market.

"This is a reactionary move from Citrix," he said. "The rest of the crowd has gone this way. I expect some curious and cautious intrigue from their users."

Needham, like Wasson, said users want an end-to-end solution that integrates WAN optimization. He said that the market will eventually be whittled down to a few key vendors that offer such tools.

Forrester Research senior analyst Robert Whiteley said the acquisition represents a positive move for Orbital Data, and the vendor's customers will also be able to reap the benefits.

"This is all good for Orbital owners and Citrix owners alike," he said. "They can now go to a large vendor that was probably already in their strategic shortlist. The only downside could potentially be that acquisitions tend to be distracting; but Citrix has proven to be pretty good."

Whiteley said the move also keeps Orbital Data in the market, while boosting its potential.

"In a nutshell, I think this is nothing but an upside for them," he said. "I think Orbital Data was one of those companies that had great technology but was in a market where the large incumbent vendors like Cisco, Juniper and even F5 to some degree were making strong moves."

"Orbital had a couple of things in particular: its transparency, which was much less intrusive to deploy, which is good for the network folks; and also its scalability," Whiteley continued. "It went all the way up to OC 3 in speeds natively; and some of its other things like Orbital Edge - the ability to actually do symmetric acceleration to a client. All of this was good stuff that was going to go untapped if it wasn't acquired."


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