One of the leading providers of virtual computing solutions, Citrix Systems Inc. (CTXS) will expand its Virtual Desktop Infrastructure (VDI) footprint by acquiring Kaviza, which makes VDI-in-a-Box product. Kaviza is a privately owned company based in Sunnyvale, California and has been strategic partner to Citrix since April 2010.
VDI is a server computing model that enables desktop virtualization that stores user’s data centrally through a remote central server, instead of providing local storage. Thus, when users work from their local machines, they can easily access all programs, applications, processes, and data stored centrally in a virtual machine.
Kaviza's VDI-in-a-Box is an integrated solution, which comes in a package of different technologies and expertise required for building virtual desktop solution. It focuses on simplifying the entire process of deploying a VDI as well as providing time and cost economy for small and midsize businesses.
Virtualization is percolating into small and midsize businesses operations, reducing desktop management costs, improving security and strengthening business networking.
The desktop virtualization market is expected to accelerate further in 2011. While server virtualization currently has an addressable market size of approximately 35 million servers’ worldwide, desktop virtualization has the potential to impact more than 600 million desktop users in corporate environments alone. It is estimated that desktop virtualization will be available in 50 million personal computers by 2013.
Hence, the acquisition will aid Citrix to gain ground in small and medium business markets by complementing its XenDesktop product line for enterprise-wide desktop virtualization.
We believe the virtualization market will continue to flourish with desktop virtualization as its core theme. This will sustain future growth at Citrix and its major competitors VMware Inc. (VMW) and Microsoft Corp. (MSFT).
Consequently, we maintain our long-term outperform recommendation for Citrix supported by a Zacks #2 Rank (Buy).
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