Citrix will soon be under new ownership, with two private equity funds set to buy the virtualisation stalwart for $16.5bn. Having struggled with the transition to cloud computing, Citrix will be hoping the takeover will give it fresh impetus as more businesses move to a cloud-based desktop-as-a-service (DaaS) model. A planned merger with Tibco is likely to see Citrix customers given access to better analytics tools, one expert told Tech Monitor.
Confirmed on Tuesday afternoon, the takeover will see the two funds, Elliott Management and Vista Equity, pay $104 a share for Citrix, taking the company private in the process. It will be merged with another of Vista’s portfolio companies, Tibco, which provides business intelligence software.
“Together with Tibco, we will be able to operate with greater scale and provide a larger customer base with a broader range of solutions to accelerate their digital transformations and enable them to deliver the future of hybrid work,” said Bob Calderoni, interim chief executive and chairman of Citrix. “As a private company, we will have increased financial and strategic flexibility to invest in high-growth opportunities, such as DaaS, and accelerate its ongoing cloud transition.”
Citrix takeover: why now?
Rumours of a takeover at Citrix have been swirling for some time. Like many long-lived software vendors, the company has been wrestling with the transition from the perpetual license model to the software-as-a-service era, its sales have remained largely static. Its 2021 revenue of $3.2bn only just exceeded the $3.1bn it made in 2014.
A takeover comes as no surprise, says Tony Harvey, senior director analyst for infrastructure and operations at Gartner. "There have been rumours about Citrix being acquired for some considerable time, and they've become more and more solid over time, so this isn't a surprise," he says. "Everybody loves the predictability of subscription licenses, but nobody likes the top-line revenue drop and the move to deferred revenue, and it has been difficult for Citrix. This is a chance for it to restructure."
Private ownership will give Citrix the chance "to make the changes it needs to and come out stronger at the other end," Harvey explains.
Having made its name with virtual desktop infrastructure, Citrix is well-placed to take advantage of DaaS, in which files and applications are hosted on a virtual desktop hosted in the cloud. This market was worth $4bn globally in 2021 according to data from Markets and Research, and its value could soar to $12bn by 2027.
This trend has been exacerbated by the Covid-19 pandemic, but as staff begin to return to the office, Harvey says the biggest opportunity for Citrix is to serve the hybrid market, leaning on its experience providing on-premise services as well as looking to the cloud. "The DaaS market has really exploded," he says. "There are a lot of companies in that space now, but most of them are really focused on the cloud vendors and leveraging the services that the cloud provides to deliver desktops to people."
But, he says, "not everyone is going to want their desktop in the cloud. Healthcare is a strength for Citrix, and you're not going to want a nurse's station running off a desktop in the cloud in case you lose your connection. I think the opportunity to be the biggest hybrid player is a good one for Citrix."
What does the Citrix takeover mean for customers?
By rolling in Tibco's intelligence platform, Citrix customers will potentially be able to apply a new level of analytics to the data their systems collect, Harvey says. "The kind of data you can get from a Citrix environment can give you information about what your employees are doing, how they're doing it, and how they're performing," he explains.
Though Citrix has its own analytics platform, Citrix Analytics, which can pull information from virtual desktops and applications to deliver insights on application performance and security, Harvey says adding the expertise of Tibco is likely to take this capability to the next level. "Tibco is a specialist in this area, so I can definitely see some synergies which will be beneficial [to
