Citrix, Palo Alto Networks strike strategic partnership

Wed Oct 3, 2012 7:11am EDT

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(Reuters) - Business software maker Citrix Systems and security software company Palo Alto Networks have entered a strategic partnership to offer joint application delivery and security products.

The goal is to take advantage of increasing customer demand for efficient and reliable delivery of business applications that need to be secured against cyber attacks, Nir Zuk, co-founder and Chief Technology Officer of Palo Alto Networks said.

NetScaler, which Citrix acquired in 2005, delivers applications from a data center to a business, while Palo Alto Networks specializes in network security that allows users tight control over access to applications.

The move comes shortly after their larger rival Cisco said it was scaling down its application control engine, a network device that helps sites direct user traffic to distribute excess load to more servers.

While application control is a small business for Cisco, which has seen smaller rivals take market share, its exit leaves room for Citrix to take on rival F5 Networks.

According to research group Dell'Oro Cisco had around 11 percent of the $389.6 million application delivery controller market in the second quarter, down from 14 percent in the first quarter. By comparison Citrix had a share of around 20 percent and market leader F5 Networks had 48 percent in the second quarter.

The plan to form the partnership had been in the works for several months, Zuk said.

"Customers kept telling us and Citrix why don't you work together," he said.

The partnership does not involve any financials, said Sunil Potti, vice president and general manager of the NetScaler Product Group at Citrix.

Both Zuk and Potti declined to comment on whether the companies would develop products together, but Potti said: "As you can suspect there is a unique roadmap planned".

Forrester analyst John Kindervag said the partnership gives Citrix access to a technology it does not have and Palo Alto Networks the opportunity to secure Citrix type servers and virtual desktops.

"It's two puzzle pieces coming together," Kindervag said, adding that "it seems like a win-win situation" especially because there was no overlap in products.

(Reporting By Nicola Leske; Editing by Muralikumar Anantharaman)

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