Several news resources have reported that Citrix is trying to sell the entire company to Dell. Reuters first broke the story late on Tuesday evening, and other news agencies have followed suit.
It is well known that Citrix has had pressure to increase its value from Elliott Management since it first issued a public letter in June and then forced a seat on the Board of Directors on July 29. Reuters is certainly a well-respected news agency, which adds validity to the report. If the news article is indeed true, changing the Citrix logo to a round Dell circle would have an interesting impact on the entire virtualization market.
There are certainly other potential suitors that would be a good fit as the parent company of Citrix, some more so than others. If the premise of the rumor is indeed true, who are potential acquirers?
Cisco comes to mind right away as a potential acquirer. Cisco and the NetScaler line have a small amount of crossover, as do WebEx and GoToMeeting. If the GoToMeeting piece were excluded from purchase, this relationship would provide a significant win/win all around. A few years ago when Cisco challenged the server hardware market, it was initially thought to be a doomed exercise, but it has proven to be quite successful. Adding the profitable XenDesktop product line would place Cisco smack in the middle of application and desktop virtualization and propel it to become the industry leader in this category. Further, XenMobile would make Cisco an instant top-tier player in the mobility market.
Microsoft could be an acquirer, but the upside for Microsoft would be minimal. It already receives a significant licensing boost from every XenDesktop license. Conceptually, GoToMeeting and Lync/Skype for Business overlap, so again, GoToMeeting would need to be left behind. Honestly, a Microsoft acquisition doesn’t seem likely.
IBM is also an unlikely but potential acquirer. IBM appears to be focused on systems solutions. It recently acquired Fiberlink and now has the MaaS360 mobile device/application management product in its portfolio, which would certainly overlap with XenMobile. Over the years, the synergies between IBM and Citrix haven’t been all that strong, so the chances of IBM sweeping up Citrix appear to be minimal.
HP is even less likely as an acquirer. It’s going through the final steps of its own restructuring, and acquiring a company like Citrix would be a massive disruption at this sensitive time.
And then there’s Dell. Let’s think this through…does it make sense for Dell to purchase Citrix?
Dell has been assembling a suite of virtualization-related products for many years, some of which have had more success than others. Acquisitions such as Quest and Wyse enforce the impression that Dell is thinking quite seriously about the virtualization market. In some ways, Dell already is a one-stop shop for end-user computing, but portions of the portfolio just don’t have strong products, so acquiring Citrix does have some validity.
vWorkspace vs. XenDesktop
Dell has had the vWorkspace product since the Quest acquisition, but it has never achieved major accolades or significant market share. It has been a lower-tier product, with its primary market being education, and all of the statistics have shown vWorkspace on the lower side of the single-digit percentile for market share. The vWorkspace product looks significantly like the old XenApp console, and the salespeople at Dell often sell Citrix over their own vWorkspace product.
Dell has been lacking its own protocol (it currently stacks on RDP), so if the simplistic vWorkspace were kept to address the education and other non-complex markets, adding ICA/HDX could be a boost.
Dell has also been lacking its own hypervisor, and adding XenServer to the mix may make the hypervisor market interesting. To the dismay of many, Citrix seemingly lay down and admitted defeat on the hypervisor front a couple of years ago, and a Dell acquisition could ensure that the current revitalization of XenServer continues.
Dell Enterprise Mobility Management vs.Citrix XenMobile
Dell has a mobility solution called Enterprise Mobility Management, but its market share is nothing to write home about. Replacing that with XenMobile would be a boost to Dell’s presence in the mobile device/application management arena.
Dell Networking vs. Citrix NetScaler
Dell’s networking products have never been strong, and the NetScaler product line could propel Dell in this area quickly.
If the reports are indeed true, a Cisco acquisition makes the most sense, but a Dell acquisition certainly has merit.
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