Yesterday the New York Post reported that Citrix is considering selling itself, and has brought in Goldman Sachs to explore options. The sources weren’t named, and Citrix didn’t comment on the story, but for those of us that have been following Citrix for years, this news isn’t out of the ordinary. In fact, this is very similar to what happened two years ago, when Citrix also reportedly brought in Goldman Sachs. While that rumor didn't result in a sale, it was followed by some significant aftereffects. So, it's worth a quick look at what's going on this time around, even if the story hasn't been corroborated yet.
Update #1, 9:30am PT, April 4: Or they might not be for sale, according to some sources. As usual, we have to take all of this with a grain of salt, and note that this isn't an official statement. Also, I'll reiterate what I said before: The last time this happened, there were significant changes down the line, so it's worth it to be aware of what's going on.
Update #2, April 11: Responding to a tweet about this article, the Twitter-verified Citrix account tweeted "Nope. :)"
This is just the latest round
We know all the history, but in case you want a refresher, it was in 2015 that Elliott came in, there were lots of changes (both needed and unfortunate), and Dell was rumored to be interested in buying Citrix. After another round of sales rumors in 2017, former CFO David Henshall took over as CEO from Kirill Tatarinov, and Citrix had a large round of layoffs. Since then, we’ve heard about additional smaller rounds of layoffs.
Where are we in 2019? For one, as the New York Post story points out, Elliott has made a decent amount of money by now. Citrix is looking to sell itself for more than $15 billion.
On the technology side, as we know, Citrix now has a large number of competitors that are pitching desktop virtualization and DaaS products that are cheaper and simpler than Citrix, including the as-yet unproven Windows Virtual Desktop, which Citrix will be reselling.
Citrix’s strategy is to also go after non-desktop virtualization use cases, especially security. Unfortunately, for as much competition as Citrix now faces in desktop virtualization, they face even more in these other product areas. Between this and their plans to resell WVD and Microsoft 365, I think Citrix could look more like a systems integrator in the future.
Citrix wants to get more strategic with customers, and last December CMO Tim Minahan told me that part of their plan to achieve this involves upleveling sales conversations and aligning Citrix products with C-level and board-level issues like workforce management and the talent war.
On top of all of this, Citrix is dealing with the security breach we learned about last month. This could happen to anyone, but no matter what, this is making things harder for them.
Vista Equity Partners
Besides the changing competitive landscape, what makes the current round of sale rumors different? The New York Post story names Vista Equity Partners as a potential buyer. Vista also happens to own Jamf Software, Ping Identity, and other security vendors.
Jamf and Ping have continued to operate independently since their respective acquisitions, but nevertheless, you can see how a virtual desktop provider could fit in with this portfolio, and being under the same umbrella certainly couldn’t hurt.
This is Citrix as we’ve known it for almost four years. There are bright spots. Personally, I really like that they’re going after identity and workspace management. Overall, there are plenty of interesting new features coming out on a regular basis. And total revenue and subscription revenue are still growing. But the turmoil is hard to ignore.