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May 13, 1997updated 05 Sep 2016 1:09pm

MICROSOFT THROWS CITRIX A LIFELINE

By CBR Staff Writer

Microsoft Corp has thrown a lifeline to Citrix Systems Inc by agreeing to recommend the Fort Lauderdale, Florida-based companys ICA Intelligent Console Architecture as its preferred way to access to Windows applications from non-Windows devices for the next two-and-a-half years. In addition, Microsoft has agreed to make a $75m one-off payment to Citrix plus up to $100m in royalties depending on how many copies of Windows NT 4.0 and 5.0 are shipped with Citrx technology for that purpose. That should give Citrix enough time to peel off into other markets. Microsoft wont prevent Citrix from selling ICA on Windows platforms, but it is developing similar technology using its own T.Share protocol which will support Windows and Windows CE clients. Wall Street figured the deal is a good one for Citrix and pushed its shares up $13.375 or 69.5% on the day to close at $32.625. Citrixs future has been hanging in the balance ever since Microsoft admitted it was developing multi-user extensions to NT, the sum total of Citrixs ICA-based WinFrame system software business. WinFrame enables client devices to run applications on remote NT servers, leaving the client environment to deal only with key strokes, mouse clicks and screen updates. The deal is very different from the two companys previous arrangement. Citrix, previously an NT licensee, enabling it to resell NT 3.51 components, wont be getting a license to NT 4.0 or any subsequent releases. Indeed Microsoft is trying to get all variants of NT off the market, according to Citrix. Customers will buy NT from Microsoft and choose multi-user extensions from either Redmond or Citrix. Microsoft has licensed similar multi-user NT technology from Prologue Software SA, although it wont be marketing the result as a separate product. Prologue, which doesnt even have a license to NT 3.51, has been contracted by Microsoft to come up with some multi-user administration tools, as well as consulting and training. Citrix had $148m in cash at the end of the last (its first fiscal) quarter, and no debt. Acquisitions are in its plan. Citrix will continue to sell and license WinFrame with its additional NT 3.51.

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