FLASH

Citrix Continues to Invest in XenServer

Gary Chen

IN THIS FLASH

This IDC Flash provides analysis of Citrix's XenServer 7.0 release and the future outlook for Xen and
XenServer.

SITUATION OVERVIEW

At Citrix Synergy, 2016, Citrix announced a major new version of its XenServer hypervisor, 7.0. Xen
was the first major open source hypervisor that was started by XenSource in 2003, which Citrix
acquired in 2007. Citrix continued to distribute XenServer, which packaged the open source Xen with
the proprietary XenCenter software. In 2013, major changes to the projects occurred: The governance
of the Xen hypervisor project was transferred to the Linux Foundation as a Collaborative Project, which
also happens to host the open source KVM hypervisor. Also, Citrix open sourced XenServer, which
opened up the management and tool stack to the wider community.

With XenServer 7.0, Citrix made several expected improvements as well as a few unexpected ones.
Xen was the first hypervisor to support GPU virtualization, and XenServer 7.0 continued this by adding
Intel GPU support and more scalability to NVIDIA GPUs. GPU virtualization is a key feature for
desktop virtualization, and Citrix has pursued this technology aggressively. Extending support to Intel
GPUs will lower the bar for accelerated VDI graphics, making it available to wider audience and at a
lower price point.

Citrix has always had a very close relationship with Microsoft, and this relationship has extended to the
hypervisor, a unique relationship as Microsoft has somewhat more antagonistic relationships with most
other commercial virtualization vendors. Some of the Microsoft integrations Citrix has added are as
follows:

XenServer's guest VM tools are now delivered via Windows Update, so users can now get
these updates via the standard Windows update mechanism without having to do manual
updates.
SMB storage is now supported for VM primary storage.
Windows containers, due to be released with the upcoming Windows Server 2016, is
supported as part of XenServer's container support.
A System Center Integration Pack for XenServer has been made available.
XenServer 7.0 also features what Citrix calls Direct Inspect, an API for VM introspection primarily for
use with desktop antivirus. Up until now, only VMware has pursued this kind of technology with its
vShield technology. However, Citrix claims several key differences. Direct Inspect is completely
agentless, while vShield uses a thin agent within the VMware Tools. Direct Inspect is limited to
memory introspection only, while vShield can also inspect files on virtual disk.

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Citrix now includes a subscription to Lifecycle Manager with XenServer 7.0, which is a SaaS-based
cloud application, further extending XenServer's capabilities and value.

FUTURE OUTLOOK

So what does the future hold for Xen and XenServer, especially in the light of a mature virtualization
market, increasing popularity of KVM, and the shift to cloud and containers?

While a lot of the recent open source virtualization has shifted to KVM, Xen isn't going away anytime
soon. Putting Xen under the Linux Foundation was a good move to put the project under more
independent governance and open it to more contributors. The Linux Foundation also hosts the KVM
project, and having both under the same umbrella is a sign that both hypervisor projects will continue
to live on together. Xen also has commitment from three major entities that are committed to Xen, one
of which is Citrix. Oracle uses Xen for Oracle VM for Linux and uses it to virtualize very demanding
Oracle applications, a testament to Xen's capabilities. Amazon Web Services is likely the largest
deployer of Xen, which powers its EC2 cloud and is self-supported by Amazon. As Amazon is a very
powerful player in cloud, Xen and related Xen products receive a sort of halo effect from Amazon Web
Services' use of Xen.

In the early days of the virtualization market, the main goal of VMware competitors was to achieve
feature parity with VMware. Today, VMware's competitors have improved dramatically and have
reached parity in many areas, and overall, the gap has become much closer. However, feature parity
by VMware alternatives will not shift the market significantly in today's mature virtualization market.
The primary problem today faced by competitors like XenServer is that VMware is highly entrenched in
customers, and hypervisor migration is difficult and expensive. Microsoft has capitalized on its strong
Windows base to increase share for Hyper-V; but even with Windows' help, it has been a long and
slow road for Hyper-V. Between VMware and Microsoft, there is little room for a large third player in the
traditional and established virtualization market.

Citrix's primary use for XenServer is an embedded component in XenDesktop, XenApp, and
NetScaler. XenServer is critical for Citrix's ability to introduce new desktop features such as GPU
virtualization and Direct Inspect. It also allows Citrix to deliver a full stack solution at a certain cost and
not be dependent on other hypervisor vendors that may very well be rivals. These reasons alone justify
Citrix's ownership and continued development of XenServer, and much of the development path is tied
to Citrix's desktop and application features, which is a niche use case and not the focus of other
hypervisors. XenServer's pursuit of other server virtualization customers and use cases is simply icing
on the cake at that point. With the virtualization wars largely at an end, XenServer is no longer trying to
compete with VMware and Microsoft for the general-purpose virtualization market, but rather picking
and choosing selected battlegrounds.

Citrix's XenServer strategy today is to focus on emerging geos and new workloads. Emerging regions
like China are less virtualized, which means less entrenchment from the likes of VMware and facing
the daunting task of displacing another vendor's installed base. Also, China and other emerging
markets are more preferential to open source for various reasons of anti-United States buying
sentiment and concerns about backdoors and espionage in U. S. closed source software. Citrix has
developed some partnerships in China and is seeing success with XenServer, which has been vetted
and approved by the Chinese government.

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The battle for virtualization of traditional workloads is largely settled, but the market is still wide open
for new cloud-native workloads and virtualizing containers. Open source cloud platforms, such as
OpenStack and CloudStack, have a natural leaning toward open source hypervisors. KVM is a
preferred choice for OpenStack, but Xen has dug out a small share. XenServer notably powers the
OpenStack-based Rackspace public cloud, one of the largest OpenStack clouds. XenServer has a
higher attach to CloudStack, which Citrix acquired, and distribute commercially as CloudPlatform but
recently sold off to Accelerite, which will likely impact XenServer negatively. The products now at
different vendors won't be able to as effectively coordinate development and integration nor offer a
single vendor full stack or single source of support.

One potential differentiator for XenServer is its native container support. XenServer provides insight
and management into the containers running inside of XenServer VMs, extending many of its VM
capabilities to containers. XenServer supports both Linux and Windows Docker containers using a
multiple containers to one VM model. Both VMware and Microsoft have developed a one container to
one VM model using very lightweight VMs, but in the open source world, this is only in the
experimental phase with Clear Containers that was developed by Intel using KVM. Citrix is
investigating such a model for XenServer but has not committed to anything yet. However, the
containers integration work it has done so far is a good start and ahead of what KVM and commercial
KVM vendors offer so far.

With all the changes happening with Citrix, it is encouraging to see a major new version and the effort
and investment Citrix has made into XenServer to produce such a release. Citrix's use of XenServer
for the company's desktop and networking business is unquestionable, but Citrix still faces several
challenges in expanding XenServer further. Citrix has the right strategy to focus on selected emerging
geos, open source, and new workloads around cloud and containers. However, it has little presence in
those areas and no installed base to leverage, so partnerships and OEM deals will be the key. Citrix is
making progress on partnerships with hyperconverged infrastructure vendors, cloud providers using
open source, and local partners in regions like China. However, the increasing competition from free
open source and the trend toward full stacks from more and more vendors will make selling a
standalone hypervisor more difficult as time goes by. However, with the right partners, right business
models, and signs of continuing investment, Citrix has opportunities to find niches in the market and
continue to grow XenServer.

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About IDC
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