After pressure from an activist investor, Citrix's CEO announced his plan to retire. But what does this mean for the company's product mix?
Yesterday, Citrix CEO Mark Templeton announced that he plans to retire once a successor is announced. While a CEO retiring is moderately interesting, the subtext to all of this is more so. Elliott Management, the activist shareholder that has a track record of agitating within other technology companies (most notably pushing EMC to spin off its VMware subsidiary) also announced that its partner, Jesse Cohn, is joining the Citrix board and that another independent board member is to be appointed by mutual agreement between Elliott and itself.
The interesting thing is what Elliott was pushing for previously. When it announced its 7.1% stake in Citrix last month, Elliott suggested that Citrix should carve out its non-core business – including most of the cloud and video conferencing solutions. There is a range of products in here – CloudBridge, CloudPlatform, and ByteMobile, not to mention GoToMeeting and NetScaler.
For me, the interesting thing is CloudPlatform. The product is a commercial offering built on top of CloudStack. CloudStack is an open source cloud operating system that was itself a Citrix acquisition (then called cloud.com) back in 2011. The somewhat depressing thing in all of this is that for years there has been a general acceptance that of all the open source cloud operating systems, CloudStack was the most reliable, mature, and adopted one. To see Citrix turn its back on the product (notwithstanding the fact that the open source project would still exist under an Apache license) would be a little sad.
It’s an interesting situation. We have here several billion dollars’ worth of Citrix acquisitions, not to mention technologies that are helping it be more than a one-trick pony. What Elliott is suggesting here is that Citrix gets rid of all of that and instead concentrates on what is a highly lucrative, but essentially doomed, business – desktop virtualization and all its related offerings.
It’s the flip side of being a publicly listed company, with shareholders who know a lot about short-term revenue but little about the future technology landscape. Citrix has made some really exciting acquisitions in the past that have gone nowhere, as it has fallen to investor pressure to focus on quarterly earnings rather than longer-term strategies – companies like Podio (still a Citrix product, but for how long), ShareFile (ditto) and CloudPlatform could have helped Citrix move into the next computing era. Instead, they look set to be failed big-ticket acquisitions. A shame really.
