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VMware made notable strides in desktop virtualization this year, and emerging app delivery technologies gained momentum, but for all its ups and downs, Citrix was the story to watch in 2015.
There were plenty of major developments in 2015 -- Dell's attempt to buy EMC, and the corresponding effect on VMware, the rise of app management and app refactoring, the end of Citrix VDI-in-a-Box and XenClient, and MokaFive closing its doors. But the one thing my mind kept returning to was the sheer volume of Citrix news, good and bad.
For a few years, people have been trying to figure out Citrix’s strategy as it branched out further beyond its flagship XenDesktop and XenApp desktop virtualization products. Meanwhile, Citrix's top competitor, VMware, focused on competing against XenDesktop and XenApp. There were signs of life. The Citrix Workspace Cloud management platform showed that the company could still rock and roll, but Citrix is clearly losing its grip on the undisputed leader status it has enjoyed for nearly 20 years.
A rocky start
In January 2015, Citrix made what I would call the last of its confusing moves, purchasing Sanbolic -- the makers of a product called Melio that many Citrix Provisioning Services customers are familiar with. Citrix used Melio as the foundation of a new converged infrastructure product called WorkspacePod, which is a combination of Citrix’s software and hardware from various partners. To be honest, it seemed to me like a half-hearted effort to stay in the conversation with VMware and its EVO:RACK and EVO SDDC hyper-converged infrastructure products.
After the Sanbolic acquisition -- though I wouldn’t say because of it -- things at Citrix started to change. The company restructured later in January, cutting 900 jobs and announcing the end of life for VDI-in-a-Box, Citrix's turnkey desktop virtualization product. Then, the company announced in September that it would stop selling XenClient. These were all good steps, and it seemed that Citrix had a handle on the situation.
The Elliott effect
In June, news broke that activist hedge fund Elliott Management, which at the time was a 7.5% shareholder in Citrix -- a number that has grown in recent months -- sent a letter to Citrix calling for the ouster of longtime CEO Mark Templeton, and for the company to sell, spin off or otherwise divest itself of several noncore properties, such as GoToMeeting, GoToMyPC, ByteMobile, CloudBridge and Podio.
Some people worried that Elliott would sell Citrix for parts to prop up the value of its shares, and then dump the stock at the expense of Citrix and its customers. The reality is that if Citrix was performing well, Elliott would not have gotten involved in such a public manner. It’s easy to get all worked up in this situation, but the suggestions -- okay, the demands -- Elliott made are exactly what Citrix needs to be doing: focusing on the core technologies that got the company where it is today. Citrix didn’t become a $12 billion company by acquiring Podio or ShareFile; it did it with XenApp, XenDesktop, NetScaler and XenServer.
Since that initial letter, Elliott gained a seat on Citrix’s board of directors, the company replaced Mark Templeton with interim CEO Robert Calderoni and laid off even more of its workforce. In the next few months, Citrix will likely name a new CEO, and there are rumors that Citrix itself is up for sale -- it makes sense for the company to at least entertain offers. Dell was rumored to be interested in Citrix until Dell announced its intent to buy EMC -- and with it a stake in VMware -- but names like Cisco, Hewlett Packard Enterprise and even Microsoft keep popping up. Could it happen? Sure. The likelihood of it is uncertain, though.
Citrix regains its focus
In the meantime, Citrix isn’t waiting around. It put ByteMobile up for sale, and then announced it will spin off the GoTo product line. Citrix is also actively moving around product teams so it can better execute on the company's core products. Having spent time at Citrix headquarters recently, I can honestly say that its attempt to refocus is legitimate. The future for Citrix hinges upon XenDesktop, XenApp, Netscaler (for now at least), XenServer, XenMobile and Citrix Workspace Cloud, which is exactly what it should be.
There are tough times ahead for Citrix, with more layoffs and tough decisions in regard to products and teams coming. Customers can take solace in the fact that things appear headed in the right direction. 2016 will provide plenty of interesting Citrix news, with a new CEO and more involvement from Elliott and the board members it can recruit.
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