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As part of an ongoing restructuring plan, Citrix intends to spin off its GoTo line of products into a separate, yet to be named public company and will kill off some of its technologies.
The GoTo business spinoff, which includes Citrix GoToMeeting, GoToWebinar, GoToMyPC, GoToAssist, Grasshopper and OpenVoice, will result in the loss of about 1,000 jobs. The move is expected to be completed in the second half of 2016.
The motivation is to allocate more resources into enterprise products surrounding application and data delivery, such as XenApp, XenDesktop, XenMobile, ShareFile and NetScaler, Citrix said.
In addition to spinning off the GoTo products, Citrix will no longer invest in certain existing products and programs. In some cases, the company will bundle products into other areas, but in other scenarios, it will end some product lines completely. Citrix did not detail which products it will cease investment in.
Competing against tech giants such as VMware and Microsoft forces Citrix to make adjustments, said Douglas Grosfield, president and CEO of Xylotek Solutions Inc., an Ontario-based IT consultant.
"Citrix is a proven technology that I've been working with since the very early days," he said.
Customers will be on the lookout to see which products get discontinued as it may have an impact on them, Grosfield said.
Robert Youngresearch analyst, IDC
"Those are both very competitive areas that Citrix may find are more distractive than beneficial," Young said. "XenServer is not deeply entrenched in the enterprise, so I don't know that it's driving as much business as Citrix would like."
These are the two most likely areas for Citrix to rationalize, Young speculates, as it would be too expensive to take the lead over the abundance of competition in those areas, so it would make more sense to invest those resources into the core business instead.
Citrix has already cut investment into XenClient, and stopped selling VDI-in-a-Box earlier this year. The company also transformed AppDNA from a standalone product to an additional feature in the platinum versions of XenApp and XenDesktop. The spinoff of the GoTo product line does not come as a surprise as it doesn't fall under the main line of business for Citrix, said Jack Gold, founder and principal analyst at J. Gold Associates LLC in Northborough, Mass.
"The GoTo line is more of a peripheral services play, which doesn't fit into the Xen family of products," he said. "It's a good move that allows Citrix to focus on their core businesses..." Despite the news of Citrix's intention to lay off more than 10% of its workforce, Young says customers of its core offerings should be encouraged about Citrix's narrower focus.
Close to two years ago, Citrix was "the dominant player" in the virtual client computing domain, Young said, but since then, it has invested in its broader portfolio. While this was going on, VMware worked through partnerships and acquisitions to fill in the gaps in its offerings to catch up, and now drives some hard competition.
"Citrix having a broad portfolio was a distraction as it has taken on more products," Young said. "It had to allocate resources, and became more of a convoluted business, while VMware went at end user computing pretty hard."
By downsizing its business, Citrix may even be able to get new product versions out quicker than before, Grosfield said.
"The virtual space is a very competitive business," he said. "If they can economize a bit and drop some redundancies and tighten the product portfolio, then they can focus on the individual products themselves, leading to a smaller, more reactive business unit."
Ramin Edmond is a news writer with TechTarget's End User Computing media group. Contact him at [email protected].
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