Citrix could double down on its digital workspace technology and abandon its software-defined WAN product following its $16.5 billion acquisition by a private equity consortium, analysts said.
The Citrix product line consists primarily of the Citrix Workspace product that allows employees to run cloud applications on a desktop. Citrix distinguishes itself from competitors Microsoft and VMware through its workflow simplification software Microapps, developed for and integrated with Workspace, analysts said.
Citrix has been slower than competitors to migrate its digital desktop to the cloud, said Mark Bowker, an analyst at Enterprise Strategy Group. But he added that he expects the acquisition to aid the company's transition from on-premises virtual desktops to cloud-hosted digital workspaces.
"They want to recalibrate their business to … address the future of work and digital transformation," Bowker said.
This week, Vista Equity Partners and Evergreen Coast Capital Corp., an Elliott Investment Management LP affiliate, announced they would acquire Citrix and merge it with business intelligence vendor Tibco Software. The firms expect to close the deal in the second half of the year, creating one of the largest private software companies.
"As a private company, Citrix will have increased financial and strategic flexibility to invest in high-growth opportunities that fuel innovation," said Tim Minahan, executive vice president of business strategy at Citrix.
Those investments will likely improve Citrix's Workspace desktop-as-a-service (DaaS) offering, according to Gartner analyst Tony Harvey. Gartner forecasts the DaaS market will grow 18% annually through 2025.
Tony HarveyAnalyst, Gartner
"So, there is a clear opportunity for Citrix to invest and grow in this space," Harvey said.
Citrix will also focus on integrating Tibco's data analytics into Workspace, according to Steve Brasen, an analyst at Enterprise Management Associates.
Tibco's tools will give employers visibility into the apps employees use, and how they're using them, Brasen said. That will help employers determine which employees are better at which tasks and where to focus resources.
The fate of Citrix's SD-WAN product used to manage the connectivity between branch offices, the cloud, and the corporate data center isn't clear. The company has SD-WAN and application delivery controller products that run separately from Workspace.
When private equity firms acquire IT management companies, they push for predictable revenue, and the best way to do that with Citrix is to bolster its DaaS features, Brasen said.
"If you're going in that direction, it does make sense to spin off some of the network management tools," Brasen said.
Former CEO David Henshall had been crucial in Citrix's transition to the cloud, according to Bowker and Brasen. Henshall stepped down shortly before media reports of a possible acquisition and was replaced by interim CEO Robert Calderoni, who had led Ariba before SAP acquired it.
The merger of Citrix and Tibco will form a software company with 400,000 customers and 100 million users across 100 countries. The combined company would serve 98% of Fortune 500 companies.
Citrix's board of directors unanimously approved the deal, but it remains subject to its shareholders' and regulators' approval.
Citrix will continue to operate under the Citrix name and brand, and its headquarters will remain in Fort Lauderdale, Fla., the company said. Citrix has more than 9,400 employees worldwide.
Enterprise Strategy Group is a division of TechTarget
Maxim Tamarov is a news writer covering mobile and end-user computing. He previously wrote for The Daily News in Jacksonville, N.C., and the Sun Transcript in Winthrop, Mass. He can be found on Twitter at @MaximTamarov.