Moving to remote work over the past couple years may have vaulted video conferencing solutions like Zoom into the popular consciousness and culture, complete with memes, but there’s a lot more that went into enabling work from home than just video cameras and mute buttons. Many other companies were working more quietly in the background on the overnight transition.
For instance, Citrix, which announced this week that it would be taken private in an acquisition by a private equity firm, played a key role in enabling and securing enterprise organizations’ remote work efforts. Citrix said that Vista Equity Partners and Evergreen Coast Capital Corp. will acquire the company in an all-cash transaction valued at $16.5 billion, including the assumption of Citrix’s debt. The private equity firms plan to combine Citrix with data management, business intelligence, analytics, and machine learning giant Tibco. The combined software company will have 400,000 customers, including 98% of the Fortune 500, according to Citrix.
Known for its virtual applications and virtual desktop technology, Citrix played a key role during the pandemic in helping many enterprise organizations that had no experience with operating remotely be able to access their legacy technologies from remote locations. Secure remote access has been Citrix’s specialty from the beginning.
Cloud Computing Transition
But with the rise of cloud over the past several years, Citrix itself has been working to move in this direction, too, shifting from selling perpetual licenses to subscription SaaS services; shifting from on-premises to cloud solutions; and shifting from point products to platform services.
The move to being privately held will give Citrix the investment needed for these moves and allow the company to execute them out of the public eye, according to Andrew Hewitt, senior analyst at Forrester Research.
“Citrix is really trying to push people towards cloud-based subscription products,” Hewitt says. “That can be a very difficult drive for them -- for any software company, really -- to make.”
Hewitt notes that the private equity firms partnering to acquire Citrix have had experience helping its portfolio companies make similar transitions.
“Citrix has been trying to transform from this app and desktop virtualization-focused vendor to a broader vendor that’s really focused on enabling hybrid and remote work,” he says. "I think this acquisition will really help them double down on that focus and enable them to expand their overall value proposition to a greater number of customers.”
What About Pricing?
For enterprise customers, the Citrix/Tibco private equity deal could mean a positive change in terms of pricing.
Hewitt says that the deal could mean simplified packaging and pricing -- a welcome change from the company’s reputation for complexity in these areas for enterprise organizations.
Amazon, Microsoft Competition
Still, the Citrix/Tibco company will face challenges ahead in the form of competition in the desktop virtualization space from Amazon Workspaces and Azure Virtual Desktop.
“When it comes to the large hyperscale vendors, it’s always a mix of competition and cooperation,” Hewitt says. “You’ll see Citrix directly competing against Microsoft and Amazon when it comes to desktop as a service … but 'coopetition' is happening as well. Citrix has done a lot of work with Microsoft to build additional functionality on top of Azure Virtual Desktop to provide better management and a better experience overall, connecting into the Citrix Workspace as well.”