Citrix OEMs IP Technology from Global IP Solutions

About a month ago, Citrix and Global IP Solutions, a provider of IP technology, entered into a OEM license and distribution agreement to provide VoIP and PSTN audio conferencing for GoToMeeting and GoToWebinar.

I'm curious what happened to the $26.6M investment Citrix made in Nov 2008 to acquire VAPPS, a provider of VoIP solutions. From my understanding, the acquisition was made so Citrix could provide better VoIP to its customers. Was the VAPPS integration more challenging than expected? Did management opt to scrap the integration project in favor of OEMing with a VoIP provider instead? Was positioning VoIP as an audio solution hard for the Citrix sales team?

I thought the VAPPS acquisition made sense but like all acquisitions, execution and integration can be very challenging.

Global IP Solution's Voice ConferenceEngine and VoiceEngine are the two components that will be utilized by Citrix.

Thanks,
David Chao
The Web Conferencing Expert

Citrix Buys a Phone Company

Citrix ventures into the audio conferencing business with their acquisition of Vapps, based in New Jersey, for $26.6M. With the economy where it's at, the acquisition isn't that bad of an idea since there are many small business out there with cash-flow problems which an acquisition like this would solve. Citrix also benefits with a discounted purchase price. (Vapps has about 15 employees and does about $2M in sales revenue.)

Vapps' main focus is on VoIP, something that Citrix has been trying to get right on their own with their Total Audio Package but have been unable to overcome the ongoing issues with audio echos and degradation.

It will be interesting to see what comes from the Vapps acquisition and if there will be integration with the Citrix solutions.

Thanks,
David Chao
The Web Conferencing Expert

Citrix Downplays Need for Video at SMB Level

As I mentioned in a blog in October...that Telepresence would enter the SMB and consumer markets, John Chambers: CEO of Cisco, has predicted that Telepresence will be in homes in less than a year. http://davidchao.typepad.com/webconferencingexpert/2008/10/telepresence-ma.html

Brett Caine, President of Citrix, sees things differently. Brett Caine sees little need or demand for video at the SMB level. He has also stated that there is little demand for instant messaging, video chat, and teleconferencing...though Citrix just acquired audio provider Vapps based in New Jersey. (It should be noted that Citrix does not have instant messaging or video capabilities today and perhaps why they the perception is that these solutions are of "little need or demand.")

The only potential obstacle that I can see with consumer-based Telepresence is internet bandwidth. Not every home has a broadband connection as some homes are still using solutions like NetZero. It will be the consumers who pay more for broadband that will see the benefit of Telepresence and want to pay for it, not the NetZero type users.

Telepresence Providers:

• Cisco
• HP Halo
• LifeSize.com (Small company that has done $14M in revenue)
• Tandberg
• Microsoft Roundtable

Thanks,
David Chao
The Web Conferencing Expert