Q&A: Citrix positions its acquisitions around an 'access management vision'

Citrix made its name with a specialized software product, Citrix MetaFrame, now called Presentation Server. It was used by a blue chip list of Fortune 500 companies to run Windows applications on servers, accessed by PCs via Citrix’s communications protocol ICA. For several years, Citrix has been positioning its product line around a theme that company executives recite like a refrain: application access management.

Michael Cristinziano, Citrix vice president of strategic development was recruited to join Citrix just over three years ago by CEO Mark Templeton to oversee Citrix's merger and acquisition strategy. The job keeps him very busy; the company has invested more than $600 million in acquisition during his tenure. The recent top purchases have been:

* Orbital Data, $50 million, announced August 2006
* Reflectant, $16.7 million, May 2006
* NetScaler, $300 million, June 2005
* Teros, $27.4 million, November 2005
* Net6, $50 million, November 2004

Cristinziano spent most of the 1990s as an investment banker and Wall Street analyst, focusing on telecommunications and networking companies. In the 1980s, he was in engineering, with Bellcore, now Telcordia.

Wall Street seems in general to approve of Citrix’s spending plan. In 2002, the company's stock cratered, almost hitting bottom at about $5 per share. Since then, the price has made a long, steady climb, hitting a 5-year high of $45.50 per share in May of this year. It's now dropped down to just over $30, in the wake of the two most recent buyouts.

Cristinziano spoke with Network World Senior Editor John Cox about his role, how the acquisitions fit into the company’s so-called “access management vision,” and Citrix’s acquisitions and integration strategy.

You'd covered Citrix as a financial analyst. Why did you accept job offer from Citrix?

The attractive thing in coming to Citrix was changing it from a single-product company to a diversified product company. This is a big change. When I joined, nearly all the revenue came from MetaFrame, now [called] Citrix Presentation Server.

And today?

In 2002-03, about 95% of our revenue came from Presentation Server. In the second quarter of 2006, about 75% of revenue is Presentation Server, which grew about 10-12% year over year. So the "new stuff" is now 25% of revenue. The new stuff really started in 2004, with Citrix Online, our software-as-service, based on our "GoTo" product line [with the acquisition of ExpertCity].

But this new stuff is growing significantly faster. Online services were about 13% of Q2 [2006] revenues, and they grew 47% year over year. The remaining products are about 12% of quarterly revenues, including Net6 [Citrix Access Gateway], NetScaler, Teros [Citrix Application Firewall], and Edgesight. They grew 25% from Q1 to Q2 in 2006. NetScaler grew from $20 million in 2004, to $40 million in 2005, and the pace continued into this year.

Wall Street expects Citrix will finally reach $1 billion in revenue this year. Will it?

Mark Templeton, our CEO, put that goal out there: he put it on the cover of the 2002 annual report to shareholders. [Before I joined Citrix,] I told him that took guts, because 2002 was a down year for Citrix. I asked him “why are you so bullish?” That's when he spelled out his “access management” vision. And he convinced me to join the company.