The namesake of our site, Brian Madden, was fond of making sweeping declarations and predictions about the direction of companies and technologies. Naturally, these fostered a few disagreements, most notably his 2008 prediction that VDI would be "ready for wholesale desktop replacement in 2010." That article, which listed non-persistent VDI, advanced display protocols, offline VDI, and better app virtualization as requirements to get there, led to several...let's call them...discussions.
Brian may argue that he was right on his predictions because those four things needed to be addressed before moving on (I say "addressed" because at some between 2008 and 2010 the need for Offline VDI evaporated), but along the way we also learned we needed to address storage and graphics, both of which were solved after 2010. In fact, we wrote our book, The VDI Delusion, in 2012, and it wasn't until our follow-up, The New VDI Reality in 2013, that we thought VDI was ready to rock.
So Brian's track record on predictions is debatable. They're both insightful and inciteful, and it's with that in mind that I wanted to revisit one of his last predictions.
In an article in November of 2015, Brian wrote an article about detailing Citrix's plans to sell of GoTo and lay off 1,000 employees. This was his response to the first large announcement after Elliott got involved, and, for the most part, it was just analyzing the announcement. At the end, however, he wondered aloud something that has come up time and again with people I've spoken to around the industry. He wrote:
"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)."
Earlier this year, especially when David Henshall took over as CEO, I would've bet on that prediction, but here we are in December and the rumor mill has quieted down a bit. Citrix did go through another round of layoffs, which we covered as it was happening, then analyzed. They also announced their intent to buy back $2 billion worth of shares over the course of 2018. As I wrote in our Friday Notebook coverage of that announcement:
"This usually happens when a company believes their stock is undervalued. Buying a large portion of it back results in fewer shares on the open market (increasing demand), while also allowing the company to sell the shares back to public when the price increases. To accomplish this (and this is likely a drastic oversimplification), they’ll use their existing cash assets to buy shares on the open market, while also raising $750 million through an “underwritten public offering of its 4.500% Senior Notes due 2027,” which basically means they’re selling bonds that will be repaid in 2027."
In this case, "undervalued" might mean that while Citrix was shopping themselves around, the offers they got weren't palatable, so they're regrouping to take another swing in the next few years. Regardless, these don't sound like the plans of a company that will be changing in any significant way in the immediate future.
With that in mind, it's looking more likely that we'll see a Citrix Synergy 2018 (as opposed to an HP Synergy or a Cisco Synergy). Even before Synergy, though, I'm looking forward to hearing what comes out of Citrix Summit in January. It's an NDA, partner-only event, but there is usually some news that comes out around it, and I'm hopeful it sheds some light on the future of the company.
As for Brian's prediction, the year isn't over yet, but there's still a small part of me that thinks and hopes Citrix can turn this around. As I wrote last month, they've been unsuccessful in their quest to find the “next big thing” over the last five years, so it's going to take something big to change the growing sentiment around the industry that Citrix is slowly bleeding out. 2018 might be their last shot, so who knows…maybe Brian will have only been off by a year this time.