Citrix 2009 Annual Report Download - page 52

Revenues
Net revenues include the following categories: Product Licenses, License Updates, Online Services and
Technical Services. Product Licenses primarily represent fees related to the licensing of the following major
products:
• Our Desktop Solutions, comprised primarily of our desktop virtualization product XenDesktop and our
application virtualization product XenApp;
• Our Datacenter and Cloud Solutions, comprised primarily of our server virtualization products,
XenServer and Essentials for XenServer and Hyper-V and our application networking products
NetScaler, Access Gateway and Branch Repeater.
In addition, we offer incentive programs to our VADs and VARs to stimulate demand for our products.
Revenues associated with these programs are partially offset by these incentives to our VADs and VARs.
License Updates consist of fees related to our Subscription Advantage program that are recognized ratably
over the term of the contract, which is typically 12 to 24 months. Subscription Advantage is an annual renewable
program that provides subscribers with automatic delivery of unspecified software upgrades, enhancements and
maintenance releases when and if they become available during the term of the subscription. Online Services
revenues consist primarily of fees related to online service agreements from our web collaboration, connectivity
and remote support products, GoToMeeting, GoToWebinar, GoToTraining, GoToAssist and GoToMyPC which
are recognized ratably over the contract term. Technical Services revenues are comprised of fees from technical
support services which are recognized ratably over the contract term, as well as revenues from product training
and certification, and consulting services revenue related to implementation of our products, which is recognized
as the services are provided.
Year Ended December 31, 2009
Compared to
2008
2008
Compared to
20072009 2008 2007
(In thousands)
Revenues:
Product licenses ................... $ 538,975 $ 620,215 $ 577,144 $(81,240) $ 43,071
License updates ................... 604,968 559,340 484,669 45,628 74,671
Online services ................... 308,177 260,065 213,744 48,112 46,321
Technical services ................. 161,968 143,734 116,385 18,234 27,349
Total net revenues ............. $1,614,088 $1,583,354 $1,391,942 $ 30,734 $191,412
Product Licenses
Product License revenue decreased during 2009 when compared to 2008 primarily due to decreased sales of
our application virtualization products of $118.7 million partially offset by increased sales of our desktop
virtualization product of $37.1 million. The decrease in our application virtualization product sales was driven
primarily by weakness in the global economy as discussed in the Executive Summary above. Product License
revenue increased during 2008 when compared to 2007 primarily due to increased sales of our application
networking products of $17.0 million, sales of our server virtualization product of $12.8 million, sales of our
desktop virtualization product of $5.1 million and sales of our application virtualization products of $5.0 million.
We currently expect Product License sales to increase when comparing the first quarter of 2010 to the first
quarter of 2009 primarily due to anticipated improvement in the global economy and its anticipated impact on the
IT spending of our customers.
License Updates
License Updates revenue increased during 2009 when compared to 2008 primarily due to renewals related
to our Subscription Advantage program over a larger base of subscribers. License Updates revenue increased
44