Citrix announces plan to spin off GoTo, lay off 1000 employees, and move HQ back to Florida

Ok the part about moving the HQ back to Florida is me reading the tea leaves, but the first two are true. Yesterday Citrix announced their business plan for the next two years and said that they're going to spin off the GoTo family of products.

Ok the part about moving the HQ back to Florida is me reading the tea leaves, but the first two are true. Yesterday Citrix announced their business plan for the next two years and said that they’re going to spin off the GoTo family of products. Let’s look at the details of each of these announcements.

Citrix’s announced business model for the 2016-2017

The press release didn’t have too much information in it, but the slides from yesterday’s investor conference call have lots of details.

First, Citrix says they’re going to simplify their business by focusing on their core enterprise strategy, naming five product lines that they’ll focus on: XenApp, XenDesktop, XenMobile, ShareFile, and NetScaler. Everything else is “being evaluated for rationalization.” (Rationalization, in the context of business, means selling off or closing down.)

They claim this is necessary because simply “doing more with less” is not an option. (That is a quote from their slides.) This is funny because they have white papers, partnership marketing materials, and case studies where they literally use the exact phrase “doing more with less” as a benefit to using Citrix products. So… good luck rationalizing that.

Citrix also specifically called out Workspace POD, Podio, and the Start-up Accelerator as products that they’ll wind down, as well as other unnamed “non-core” solutions. It’s interesting that XenServer is not included in the list of core products (or even mentioned in the slides at all), meaning it’s one of the products they might get rid of.

As part of this focus, Citrix plans to “impact” (business-speak for “layoff”) up to 1,000 full-time, temporary, and contract workers within the next three months. (These 1,000 people are not including the people that are spun-off with the GoTo business.)

For 2016, Citrix is setting a goal of 1-to-2 percent revenue growth, which, let’s face it, is codename for zero. They’re targeting 4-to-5 percent revenue growth for 2017, which, again, seems darn close to zero. I mean really… saying your best case scenario is 5% growth in two years? Yeah… I’m calling that zero.

“GoTo” spin-off

Citrix also announced that they’re going to spin off the GoTo products into their own standalone publicly-traded company by the second half of next year. That spinoff will create a pure-play SaaS company with revenue of approximately $600 million. Products in the new company will include all the “GoTo” products as well as Grasshopper and OpenVoice.

Moving HQ back to Florida?

Citrix describes their current corporate structure as having “dual” headquarters in Santa Clara and Ft. Lauderdale. In one of the slides talking about how they’re going to achieve over $200 million in operating cost savings by 2017, they claim that they’ll save $24 million through “increased utilization of our lower-cost locations."

Considering this is on the heels of an article in the San Jose Business Journal a few weeks ago which reported that Citrix will not be moving into the brand-new 170,000 sq. ft. building in Santa Clara that they signed a lease on last year, I’m assuming that means they’ll make big cuts in what they do in the Bay Area. I’m sure they’ll keep something out here, but having two HQs can’t possibly make sense in this new streamlined, efficient company.

Will Citrix still be a company by the end of 2017?

As I’ve written several times before, I believe there is exactly zero chance of Citrix being a company by the end of 2017. I don’t mean they’ll go out of business, rather, I’m sure that HP, Cisco, Microsoft, or someone will end up buying them (or they’ll end up split into pieces and bought by multiple companies).

Don’t get me wrong—I’m glad that Citrix made these announcements. The bleeding has to stop. VMware is doing everything right in the EUC space and Citrix is bleeding talent. Yesterday’s announcement was a step in the right direction. Hopefully they’ll make several more right steps and get this ship pointed in the right direction before it’s too late.

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Perhaps they will fold XenServer into XenDesktop/XenApp (does anyone even buy it standalone?) In the PR they say this "... in some cases moving technologies into strategic products". That could very well refer to XenServer. After all, they did pay $500M for it 8 years ago ...


www.brianmadden.com/.../citrix-buys-xensource-for-500m.aspx


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I'm guessing the Workspace Pod stuff will include the SanBolic pieces?


Not much mention of the non-Workspace Cloud, Cloud pieces like CloudStack and CloudPortal.


Soon be 'Citrix - The Cloud Company who sees clear skies ahead'


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Seen this on a couple of sites now:-


"In a bid to minimize its increasing costs, the company has plans to cut over a 1,000 jobs in the coming quarter, as it plans to move its headquarters back to Florida"


@Brian


If I send you some tea leaves in the post can you tell me what the next set of lottery numbers will be?


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Santa Clara has never been an "HQ", it's always been called the "Silicon Valley Campus" internally at Citrix.  Florida/Ft Lauderdale is the headquarters, not sure where this confusion comes from.  Mostly what's happening is the current executives, who are financial types and not tech product people, are unwinding the spending spree that Mark Templeton engaged in over the last 10 years.  Mark had a strategy of sorts that I'm guessing embraced the VC mentality that to get one good product you have to buy 5.  His shoes have been filled by finance and investment people who don't embrace this approach and now they're unwinding Mark's "innovation".  We used to laugh at products like Podio which is some kind of Facebook for basket weavers.  The GoTo division in Santa Barbara never integrated (at the people level) well with the enterprise side of the business so there's more to this than meets the eye.  More than anything Citrix needs a CEO that's a real tech person, not an accountant.


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@Michal Roth


I don't see why they should even bother with XenServer.  Their products run incredibly well on HyperV and vSphere.  IMO Xen just forces them to spend money on a product they simply don't need. Those are dollars they can be spending on their core products.  


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@Monty V, as to where the "confusion" comes from about Santa Clara never being an HQ...


How about this page? www.citrix.com/contact.html


In the "Corporate Headquarters" it lists two locations (Santa Clara and Ft. Lauderdale), and the SC one is listed first.


Or the fact that their press start with the phrase, "Santa Clara, Calif. -- <date> -- " (In fact the press release announcing their new corporate focus came out of SC.


So I would actually argue the opposite, that really for the past 5 years or so, you'd have a hard time justifying Lauderdale as an "HQ".


I do agree about Mark's "If you want to buy one great product, you have to buy 5 other ones".. and I agree that getting a real tech CEO instead of an accountant would be awesome.


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@Rick: I didn't say I saw that :-) - I was just explaining how the PR could be read through the eyes of some that does see that future for XenServer.


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@Michel..  roger that


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Citrix being bought by one of the above mentioned is the best thing that can happen for VMware EUC and smaller players like Ericom


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So, Brian, if your predictions come true, what do you plan to blog about going forward?


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@brian - Citrix will bounce back. You have my word.


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@citrix_fan_boy


It's what they'll bounce back as that I'm worried about.....


In my considerable tenure there it went from my favourite place to work of all time (people/outlook/products) to, meh....I'll happily take a job making sure all of the baked bean tins face the right way at Walmart.


In the early days MarkT surrounded himself with folks who embraced his vision to look after partners, customers and above all, employees. Not sure he ever saw it, but he let several wolves in the door, many of whom made it way up the pack hierarchy and have changed the whole ethos of the company. Forget Elliot, the rot was already underway.


Feel desperately sorry for all the Citrites who now have to endure yet more pain until this is all over in the new year.


Citrix will always have great products and I hope you do bounce back, but it will never be the same place again.


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Have to say I'm struggling to see the benefit of ditching XenServer and then starting to pay licence fees to VMware or MS for the cloud portal thats doing so well.


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