This content is part of the Conference Coverage: Citrix Synergy 2017 conference coverage

Citrix GoTo joins LogMeIn as housecleaning continues

Citrix GoTo will merge with remote desktop vendor LogMeIn, so Citrix can devote more resources to its core application delivery, networking and mobility products.

Citrix will be able to focus more on its core products after offloading its GoTo business to LogMeIn.

Citrix this week spun off GoTo, its line of online collaboration products, which will merge with remote desktop software vendor LogMeIn Inc. in a $1.8 billion deal. The merger gives Citrix more cash to spend on application delivery, networking and mobility products, and it reduces overlap with close partner Microsoft's technologies, said David Johnson, analyst at Forrester Research.

"By clearing out the overlap with Skype for Business and Microsoft enterprise collaboration tools, this reduces conflict to work more closely together in the future," Johnson said.

LogMeIn's deal for GoTo marks the latest chapter in more than a year of upheaval for Citrix. In June 2015, activist investment firm Elliott Management penned an open letter pushing for changes at the company. In October, longtime CEO Mark Templeton left Citrix; a month later, the company disclosed plans to spin off GoTo and bundle or discontinue other noncore products.

"Its strength was virtualizing the end-user experience, and it realized it bit off a little more than it could chew," said Doug Grosfield, president and CEO of Five Nines IT Solutions, an IT consultancy in Kitchener, Ont. "Now, it's focused on its core strengths, and it can really be more effective this way."

Under new CEO Kirill Tatarinov, who joined the company in January, Citrix has identified its four focus areas as XenApp and XenDesktop, XenMobile, NetScaler and ShareFile.

What Citrix GoTo brings to LogMeIn

Citrix set up the GoTo-LogMeIn merger as a Reverse Morris Trust, which is a strategy a company can use to sell off small parts of its business and avoid taxes. In these deals, a company creates a subsidiary for the assets it wants to sell and merges that subsidiary with a smaller company. In this case, Citrix created a subsidiary for its GoTo products, called GetGo, and plans to merge it with LogMeIn.

It's a good outcome for both companies.
Vanessa Thompsonanalyst at IDC

To complete this kind of deal, the new combined company has to give a majority stake to the shareholders of the original company. So, Citrix's shareholders will receive a 50.1% stake. The deal is expected to close in the first quarter of 2017.

LogMeIn's president and CEO, William Wagner, will oversee the combined business, which will remain in Boston, where LogMeIn is based. The business will have more than 2 million customers and $1 billion in annual revenue, LogMeIn said.

LogMeIn's products include its flagship remote access software,, for online meetings; BoldChat for customer service; and the Xively internet of things platform. The Citrix GoTo portfolio includes competitor GoToMeeting, plus software for remote computer assistance, online webcasts and more.

"It's a good outcome for both companies," said Vanessa Thompson, analyst at research firm IDC. "Customers are still spending money on standalone meeting solutions."

By combining its customer base and resources with GoTo's, LogMeIn is a stronger competitor in the collaboration market, which is filled with big-name vendors such as Microsoft, Google and Cisco, Thompson said.

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