"I'd like to think we've had something to do with this market coming together," says Citrix founder and chairman Ed Iacobucci. "Citrix may not have invented the ASP concept, but it's close."

For more than a decade, Citrix's mission has been to convince people that a thin-client architecture--under which applications execute on a server and are displayed on the client--is more efficient, easier to manage, and less expensive to operate than conventional client-server or network computer architectures that require the client to execute applications.

This year, particularly in the last few months, interest in thin-client computing has taken off, and Citrix's fortunes are rising with it. Citrix has nearly doubled its user base--to 15 million--and its employee head-count--to almost 1,000--in one year. For the first half of 1999, net revenue skyrocketed 70% to $179.5 million, up from $105.5 million for the first half of 1998.

Furthermore, the thin-client model is being endorsed with new products from some of the industry's heaviest hitters. In the last few months, Compaq, Dell, Hewlett-Packard, IBM, Microsoft, and Sun Microsystems all unveiled thin-client products. Citrix, which has partnerships with many of these companies, is delighted with this support for its fundamental premise. "We can deliver on our vision of server-based computing effectively with those partners," Iacobucci says.

Although ASPs could become powerful business partners for users in the future, Citrix concedes that the nascent market is getting a lot of hype. "Frankly, it's still more smoke than fire. But down the road, the possibilities are substantial for reaching a much larger audience," Iacobucci says.

Analysts agree that today's ASPs are a bit insubstantial. Of about 75 self-proclaimed ASPs that attended Citrix's iForum user gathering in Orlando, Fla., in September, few had any customers and those that did had just a handful, says David Friedlander, an analyst for Giga Information Group. "But the venture-capital firms are really big on ASPs," he says. "The dot-com companies were the big rage; now ASP proposals are getting the funding."

Citrix has a head start on technology and products to support the ASP model, and the low-profile company intends to maintain its lead. Citrix has worked on 17 trials with ASPs during the past year, and the software vendor is so enthusiastic about the potential for external application hosting and the Internet that it has dedicated a new business unit, called iBusiness, to it.

Furthermore, a Citrix director chairs the newly formed ASP Industry Consortium, a 50-member advocacy group in Wakefield, Mass. Other members include leading telecommunications, hardware, and software vendors.

"Over the years, Citrix has been able to catch the trends before they really start," Friedlander says. "They're a half-billion-dollar company because they've been on the thin-client bandwagon for a long time. Now Citrix is stepping out from under Microsoft's shadow."

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Photo of Iacobucci by Tom Salyer