Citrix 2007 Annual Report Download - page 15

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agreement, we and Microsoft entered into a patent cross license and source code licensing agreements to renew
our access to source code for current versions of Microsoft Windows Server that had previously been provided to
us pursuant to the agreement between Microsoft and us dated May 2002. The technology collaboration
agreement also provides us access to the source code for Microsoft Windows Server 2008, formerly code named
“Longhorn,” and in September 2007 we signed a source code license with Microsoft for the general release
version of Windows Server 2008. The technology collaboration agreement has a five-year term which expires in
December 2009. The technology collaboration, patent cross license and source code licensing agreements do not
provide for payments to or from Microsoft.
In November 2007, we entered into a development agreement and certain licenses with Microsoft whereby
we will develop and distribute a range of Windows-based appliances for branch offices. These appliances
provide WAN optimization functionality as well as consolidate a range of functions that would normally be
carried out by discrete servers in a branch. We anticipate beginning shipments of the appliances being developed
under these agreements in the second half of 2008.
There can be no assurances that our agreements with Microsoft will be extended or renewed by Microsoft
upon their respective expirations or that, if renewed or extended, such agreements will be on terms favorable to
us. See “Risk Factors” for more information on our agreements with Microsoft.
Additional Relationships
As of December 31, 2007, we had entered into approximately 230 ICA license agreements. Currently,
numerous devices incorporate Citrix ICA, including Windows CE devices, Macintosh clients, Linux Terminals,
and other information appliances, such as wireless phones and other handheld devices. ICA licensees include
Wyse Technologies, Hewlett-Packard Company, Fujitsu Limited, Philips Speech Recognition Systems and SAP
AG, among others.
In addition, the Citrix Partner Network™, including Citrix Global Alliance Partners™, which is a coalition of
approximately 8,000 companies from across the IT spectrum that design and market solutions that are
complementary to the Citrix product family. A new initiative called Citrix Ready™ was introduced in 2007 as part
of the Citrix Global Alliance Program™. Citrix Ready identifies recommended solutions that are trusted to enhance
the Citrix Delivery Center. All products featured in Citrix Ready have completed verification testing, providing
confidence in joint solution compatibility. By leveraging our industry leading alliances and Partner Network, Citrix
Ready showcases select trusted solutions designed to meet various business needs. Through an online catalog and
our Citrix Ready branding program, customers can easily find and build a trusted application delivery infrastructure.
Citrix Ready not only demonstrates current mutual product compatibility, but it may also increase the probability of
future interoperability. For further information on the Citrix Partner Network see “—Sales, Marketing and Support.”
Research and Development
We focus our research and development efforts on developing new products and core technologies in the
Application Delivery Infrastructure market and further enhancing the functionality, reliability, performance and
flexibility of existing products. In 2005, we acquired additional expertise in Web application optimization,
Transmission Control Protocol, or TCP, multiplexing, multi-protocol compression, SSL acceleration, application
traffic management, dynamic caching, and Web application firewall technologies. In 2006, we acquired
additional expertise in tools that monitor the end-user experience, WAN optimization and acceleration. In 2007,
we acquired expertise in server and desktop virtualization. We solicit extensive feedback concerning product
development from customers, both directly from and indirectly through our channel distributors.
We believe that our software development team and core technologies represent a significant competitive
advantage for us. Included in the software development team is a group focused on research activities that
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