Citrix Enters the Desktop Space, Plans to Buy GoToMyPC

Late yesterday, Citrix announced their intent to acquire a company called Expertcity, most known for their GoToMyPC products and services. This article is broken into two sections.

Late yesterday, Citrix announced their intent to acquire a company called Expertcity, most known for their GoToMyPC products and services. This article is broken into two sections. The first is about the facts of the deal, and the second is my opinion about what will happen next and how this will affect Citrix's strategy moving forward.

The Facts:

Citrix will pay $225M (a nearly 50/50 cash/stock mix) for Expertcity. Led by an ex-AOL executive, Expertcity has two products: GoToMyPC and GoToAssist. GoToMyPC allows users to securely access their home or office computer from anywhere in the world via a web browser. Users can remotely use their systems just as if they were sitting in front of them. GoToAssist uses the same technology to allow helpdesks and call centers to access their customers' computers. For example, if you're having trouble with Quicken, you can call Intuit for tech support and they'll use GoToAssist to remotely access your desktop so that you can both view the same screen at the same time. The GoToMyPC brand will continue to exist within Citrix, and there are no plans to relocate Expertcity's headquarters from Santa Barbara to Ft. Lauderdale .

On the analysts call announcing the deal, Mark Templeton, Citrix's CEO, outlined four things we can expect from this acquisition:

  1. Expertcity's technology will lead to complementary MetaFrame solutions for access to desktop PC applications and information.
  2. Citrix will be able to enter new markets around web-based customer solutions and remote access in the SOHO space.
  3. This acquisition will enhance Expertcity's growth and give them a worldwide presence.
  4. Citrix will be able to leverage Expertcity's (a) technology and expertise in online marketing, sales, and fulfillment of software as a service, (b) product self-service provisioning, and (c) high scalability and availability technologies.

The deal is expected to close in late Q1 2004 or early Q2 2004.

My Opinion:

First of all, I think this is a great move by Citrix. Expertcity has some great technology, and one of the main disadvantages of GoToMyPC was seen when people asked who made it. (“Expert-who?”) As of September 30, 2003, Citrix had $1.2B in cash with only $580M in liabilities, so they are definitely healthly enough to shell out the $225M for this purchase.

While the two companies' core technologies are similar, Expertcity's technology is much more practical for SOHO and call center users. For example, Citrix often mentions how great their MetaFrame technology is when supporting remote users in helpdesk situations. While this is certainly true, the downside is that Citrix requires a full MetaFrame application infrastructure, and it only works when users are using applications via MetaFrame servers.

On the other hand, Expertcity's technologies can be installed on any computer and can allow remote sessions to “fat” applications.

We'll see a convergence of the two companies' remote presentation technologies. The ICA protocol is one of Citrix's flagship technologies, and I would assume that the GoToMyPC and GoToAssist products would move over to the ICA protocols. However, Expertcity's remote presentation protocols are really known for their abilities to get through firewalls. We'll also see some of that technology work its way into ICA. (Although ICA has gotten much better at this in recent years with the adoption of industry standard SSL encryption and the ability automatically detect Internet Explorer's connection settings.)

Citrix's message has long been “Access any application, over any connection, from any device.” In truth, a more appropriate message would be “Access any application [that's deployed to a MetaFrame server], over any connection, from any device.” Expertcity's technology will help Citrix realize a more true “any application” vision since their technologies also work with "fat" applications.

I'm sure we'll see new desktop access products and integrated products from Citrix in the future. For example, at iForum 2003, Citrix showed off “follow me” roaming technology that allows a users to have their remote ICA session follow them from device to device, even dynamically changing screen resolutions and color depths. By integrating Expertcity's technology, Citrix could extend the “follow me” concept to any applications—not just those already deployed to MetaFrame Presentation Servers.

Citrix could also integrate this new technology into MetaFrame's Web Interface (NFuse) products or into MetaFrame Secure Access Manager. Then, for example, a user logging into a corporate portal from home could have an icon for “my work PC” in addition to icons for their MetaFrame applications.

So, are there any challenges? Perhaps the biggest is the fact that this technology is going head-to-head with what Microsoft is developing with the remote assistance and remote desktop capabilities of Windows XP. This is why Citrix will really have to work to extend the value of Expertcity's technologies by integrating them into the existing MetaFrame suite.

From a marketing perspective, GoToMyPC's brand will help Citrix in their effort to increase household name recognition. After all, even my AOL-loving mom has heard of GoToMyPC. We'll see new products from the joint companies in the SOHO and personal space—a space that Citrix has not focused on traditionally.

Mark Templeton believes that Citrix is the access infrastructure “market definer.” (A market which, by their definition, will quickly grow to be worth $8 to $10B per year.) On yesterday's call, he said that “access infrastructure is a suite of infrastructure that customers will look to one supplier as much as possible to provide." Citrix hopes to be that supplier.

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