Citrix At A Crossroads: Which Path Forward?

Citrix announced on Jan. 29 that Mark Templeton, its CEO since 1998, will retire this year. I believe Templeton will go down as a transformational leader, having grown Citrix from a one-product company into the diverse software vendor it is today. Nonetheless, change is good. The next CEO must advance Citrix’s efforts to beef up its cloud and mobile cred. The question is, how? Should Citrix look for a CEO to lead it into that future -- or one who can position it for an acquisition?

In my opinion, Citrix should not seek to be absorbed by another tech giant -- or worse, broken up for parts. If the new CEO follows an acquisition path, he or she should favor the EMC/VMware approach, where Citrix would be an independent, wholly owned subsidiary. That would position Citrix to leverage the parent company’s market reach and capabilities and still independently grow and innovate.

One interesting coincidence is that Templeton’s announced departure coincided with Microsoft’s search for a new CEO. Citrix and Microsoft have long been allies. Microsoft gave Citrix access to the OS/2 source code to build its product, and Citrix later created Microsoft’s Terminal Server technology, which is still used under the Remote Desktop Services label. Citrix has mostly been in lockstep with Microsoft from a strategy perspective. How this relationship develops under new leadership, given that Citrix’s portfolio has diversified and is no longer completely reliant on Microsoft, is another area to watch.

How these areas play out depends on where Citrix’s new leader takes the company. As to who that new leader should be, I can name two people who I believe are up to the task: Brad Anderson, currently Microsoft’s corporate vice president in the cloud and enterprise group, and Paul Maritz, ex-CEO of VMware and current CEO of Pivotal.

Anderson reminds me of Templeton -- very energetic, passionate about technology, and able to leverage many years of experience at Microsoft in the cloud space, not to mention that Anderson as CEO should solidify the Microsoft/Citrix partnership. With Citrix needing to be laser-focused on cloud services and mobile work styles, I think Anderson can lead it down the right path.

Political bickering aside, Maritz did a great job at VMware and is in my opinion one of the best CEOs in the industry. He also has experience with cloud and mobile.

But speaking of Maritz, what about the EMC/VMware model? After all, it is prime season for big tech acquisitions.

My take: Cisco would be smart to acquire Citrix and replicate the EMC/VMware synergy. Both Citrix and Cisco need to solidify their positions in the public cloud. While the acquisition of Citrix would significantly benefit Citrix, it would also provide Cisco with a company with significant growth potential in its current customer base.

And, let’s face it, Cisco can't write software to save its life. A Citrix acquisition would address that and beef up its software portfolio.

[VMware just stepped up competition with Amazon Web Services by hiring away international technology evangelist Simone Brunozzi. Your move, Cisco.]

But it doesn’t stop there. Remember, Cisco still has to figure out what to do from a public cloud perspective. Its current partner-driven “Cisco Powered” strategy is a whiff. If it acquires not just Citrix but also Rackspace, a well-recognized brand in the public cloud sector, it would immediately have a diversified array of enterprise hardware, software, and cloud services that span today’s IT needs as far as cloud, social business, big data, security, and more. With the Feb. 10 announcement that Rackspace CEO Lanham Napier is departing and the resulting instability in the stock price, this is a great opportunity for Cisco to acquire a pole position in the public cloud.  

Figuring out a public cloud strategy is not the only thing on Cisco’s and Citrix’s minds. Extending existing software and the management layer to mobile devices is another must-do. As new Microsoft CEO Satya Nadella focuses the company on Mobile First, the Microsoft portfolio will begin introducing mobile applications to enable administrators and engineers to manage environments from mobile devices. Citrix would help Cisco solidify this piece of its mobile strategy.

I’m not saying Citrix can’t, or shouldn’t, go it alone as a standalone company. But Templeton’s retirement means the topic is under discussion, and frankly, Cisco and Citrix plus Rackspace would be a powerful combination. The synergies could bring all three decisively into the new cloud and mobile era. 

Engage with Oracle president Mark Hurd, NFL CIO Michelle McKenna-Doyle, General Motors CIO Randy Mott, Box founder Aaron Levie, UPMC CIO Dan Drawbaugh, GE Power CIO Jim Fowler, and other leaders of the Digital Business movement at the InformationWeek Conference and Elite 100 Awards Ceremony, to be held in conjunction with Interop in Las Vegas, March 31 to April 1, 2014. See the full agenda here.