Citrix Is The Newest Enterprise Tech Agency Underneath Strain From Activist Buyers
Know-how corporations, notably these with an enterprise bent, look like coming underneath growing strain from activist buyers who need to squeeze out income at the price of merchandise and jobs. Final yr EMC pressed by an activist investor ultimately bought the corporate to Dell for $sixty seven billion. Citrix is the newest firm dealing with this difficulty –and from the identical investor because it seems.
It’s been a busy week for Citrix, an organization targeted on desktop virtualization and networking. Simply yesterday, it bought its cloud administration merchandise to Accelerite, and on the identical day introduced that it had acquired Comtrade’s SCOM administration packs for Citrix customers.
What these strikes present is that Citrix is within the midst of a pivot the place it’s making an attempt to shed merchandise that it sees as outdoors of its core mission, whereas making the occasional acquisition to reinforce that mission. Meaning merchandise like Citrix CloudPlatform and CloudPortal Enterprise Supervisor are out of right here and the Comtrade SCOM administration packs are coming into the fold.
Final November, the corporate introduced it was spinning out its GoTo merchandise akin to GoToMeeting, GoToMyPC and different merchandise right into a separate firm.
There are additionally layoffs concerned right here with one thousand jobs anticipated to be minimize from the GoTo transfer alone. The corporate had over 9000 staff worldwide previous to the layoff announcement.
Citrix has indicated it needs to focus on core merchandise akin to XenServer, NetScalr and maybe Citrix Office Cloud, however it’s not essentially making these strikes as a result of it needs to vary course.
As an alternative, it seems that Citrix is underneath strain from activist investor, Elliott Administration. In the event you’re not conversant in Elliott, they’re the identical agency that purchased a $1 billion stake in EMC in 2014, and instantly started placing strain on the corporate to promote its eighty % share in VMware. Ultimately EMC bought the entire agency together with the VMware piece to Dell for $sixty seven billion. That sale is predicted to shut later this yr.
In a case of ‘Deja vu another time’ Elliott has taken an activist investor position with Citrix as nicely, pushing the corporate to make some strikes it won’t essentially have made in any other case.
These aren’t the one tech companies during which Elliott has proven curiosity. As eWeek reported in October, Elliott has its fingers in loads of tech offers. The MO is usually the identical. Elliot buys a stake, then secures a few seats on the board and begins pushing for substantive modifications in path.
The query is why a personal fairness agency like Elliott is all of the sudden smitten with these giant enterprise tech corporations. R Ray Wang, who’s principal at Constellation Analysis says it’s as a result of it might extract some cash from them.
“The personal fairness companies are concentrating on tech corporations as a result of their progress charges of 10 to twenty % could seem sluggish for tech, however are excessive [compared to] different industries. They’re within the midst of compressing these corporations for money and forcing M&A throughout the board,” Wang advised TechCrunch.
EMC bought the corporate earlier than it was pressured to make different strikes it didn’t actually need to make. Citrix wasn’t so fortunate, dumping product strains, chopping jobs and far more. These corporations might be the start of different comparable exercise by buyers like Elliott as giant tech corporations beneath strain from smaller, extra nimble rivals develop into targets of some of these companies.
Citrix didn’t reply to a request for remark earlier than we revealed this piece. In the event that they do, we’ll replace the story.