Did Citrix overpay for Zenprise?

Citrix hasn't exactly been gung-ho about mobile device management, so its decision to buy Zenprise for $355 million is a little puzzling.

Citrix hasn't exactly been gung-ho about mobile device management, so its decision to buy Zenprise for $355 million is a little puzzling.

Back in June, Citrix executive Jesse Lipson told me the company was considering adding mobile device management (MDM) to its portfolio. He described it as a sort of stopgap measure; Citrix's focus is on mobile application management (MAM) with its CloudGateway product, but most organizations aren't ready for that yet.

"We can't totally wait for the market to catch up and understand that MAM is really more the wave of the future," said Lipson, Citrix's vice president and general manager for data sharing.

In a follow-up post by Jack Madden, Citrix again expressed interest in MDM -- particularly the features that directly relate to MAM, such as the ability to uninstall iOS apps from devices. In this context, acquiring Zenprise makes sense for Citrix. But it leaves out one important piece of information: the price tag. Yesterday, Forbes reported that Citrix acquired Zenprise for $355 million.

That may not seem like a lot compared to, say, VMware's $1.26 billion acquisition of Nicira, but software-defined networking is a hot topic, and it's expected to become a big part of VMware's business. Mobile device management, on the other hand, is not a hot topic, and it's not expected to become a big part of Citrix's business. Citrix has said so itself.

"I personally think that the approach CloudGateway has taken, that's going to be the best approach a couple years from now, but we need to also look at the world of today and throw some occasional MDM features in," Lipson said in June.

MDM has some value, and it is a good first step up the enterprise mobility ladder, but it basically takes the old way of managing IT and applies it to the new way of doing business. That's not a recipe for future success.

By focusing on mobile application management, Citrix already has that recipe. MDM may be a necessary stopgap or checkbox technology, and Zenprise may offer some features that work well with Citrix's MAM. But $355 million seems like a steep price to pay.


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There are lots of MDM vendors Citrix probably could have acquired for less, or Citrix could have built their own, too, but, man, I think this is one of the biggest ways for them to make a splash in the EMM (enterprise mobility management) field. Remember how a lot of people weren't aware of Citrix doing mobile stuff (other than desktops, of course)? Well they all know now!

And even if we were thinking device management is legacy thinking, at least having MDM and MAM built into one product/SKU (as it seems like it will be), companies can dial over to less device management when their BYOD users demand it or when they realize they have less of a need for it—all without having to buy new products or rip and replace anything.


I don't think this makes a big splash for Citrix outside the enterprise mobility echo chamber. Zenprise may be a leader in the Gartner Magic Quadrant, but they're far from a household name among the general IT population.

For the sake of argument, let's say Citrix did make everyone sit up and pay attention with this acquisition. They still spent $355 million to do it. There are a lot more cost-effective ways to get publicity.


I posted this on twitter, but I'll do so here, too, for posterity: I'm reminded of this that you wrote: www.consumerizeit.com/.../it-s-time-for-a-mobile-management-reality-check.aspx


You have to remember that with the specific architecture of Zenprise, it makes a great fit for Citrix's one box/product scenario - fits well under the netscalar appliance. At the same time, it turbocharges Zenprise's MAM offering and gives Citrix a built-in customer base that smaller vendors didn't have...

In this case though, MDM will become a feature for Citrix instead of a product...


Your point about customer base is a good one, Brian. Citrix now has 1 million devices it can upsell MAM to. That's the only rationalization for spending $355 million that makes some sense to me. But it's still a gamble, and it will definitely take some time for existing Zenprise customers to hop on the MAM bandwagon.


Jack, your job is to grease the MAM wheels, and mine is to pump the brakes!


After XenSource and Sequoia everything looks cheap ;-)



True, everything is relative when it comes to acquisition costs.


I predicted an acquisition, but did not predict the price.  Valuation would come from revenue growth or customer base, not sure what either of those was for Zenprise, but I imagine much lower than MI or AW.


We were talking about that on Twitter the other day, Andy. MobileIron and AirWatch must have dollar signs in their eyes after this news, no?