Citrix/VMware Acquisitions: After the Announcement Buzz

Like many companies in the high-tech sector, Citrix and VMware have slowed down the rate of acquisitions considerably and have focused on adding a limited number of targeted, key technologies to their offerings.

Corporate acquisitions create headline bursts and excitement, but the realistic benefit of those acquisitions is determined in the months and years that follow. Let’s face it: not all acquisitions are successful, but with business pressures at an all-time high, acquirers are under tremendous pressure to make excellent acquisition decisions and to assimilate the acquired people and technologies.

Up until several years ago, both Citrix and VMware rapidly accelerated various facets of their technologies by acquiring startups. There were some failures along the way, such as Citrix’s acquisition of Sanbolic and its Melio product. Over the past twelve to eighteen months, the consumption rate for acquisitions has slowed considerably. Of course, both Citrix and VMware experienced major changes in 2016, which factored into this slowdown.

On the flip side, Citrix and VMware have each divested themselves of one or more companies in order to focus on their core business. Citrix sold off the GoTo product line, and VMware divested itself of Continuent, vCloud Air, vCloud Government Service, and vRealize Business Enterprise.

While the rumor mills abound with talk of small tech companies that would like to be acquisition targets, it’s clearly evident that Citrix and VMware are exceedingly selective about the organizations they choose to acquire. Indeed, business and financial pressures demand acquisition decisions that exceed dismal industry success rates.

VMware

The Dell disruption brought acquisitions to a screeching halt at VMware in early 2016. In mid-2016, the Arkin acquisition appended VMware with a software-defined data center solution focused on optimizing NSX. Given the attention on SDDCs this past year, this timing and technology were ideal for VMware customers, and things continue to be enhanced with new releases. This product is now known as vRealize Network Insight.

Just last month, VMware acquired Wavefront, which brings an advanced monitoring and analytics platform to VMware, and Apteligent, which focuses on mobile application performance. With the increased attention on analytics, these acquisitions will likely yield success. Still, the ink is barely dry, so it’s too early to judge the success of these acquisitions, and more integration news is likely to follow at VMworld.

Citrix

Since Kirill Tatarinov took the reins at Citrix in early 2016, only two acquisitions have occurred: Norskale and Unidesk. Citrix did acquire the intellectual property surrounding Comtrade’s Citrix-related management packs in early January 2016, but this technology acquisition has been largely labelled a bust, because the monitoring and management data is based on Microsoft System Center Operations Manager, which is generally not used by Citrix administrators.

It has been nearly a year since France-based Norskale was appended as a Citrix technology. Now running under the name Workspace Environment Manager, it focuses on various aspects of the user experience, most notably the user logon. While the administrative interface has been rebranded to Citrix and entitlements are in place, there is still not a fully cohesive strategy surrounding Citrix User Profile Management (formerly sepago) and WEM.

All the rage in January 2017 focused on Citrix’s acquisition of Unidesk and its application layering functionality. App layering is a novel way to deliver applications to users. Rather than create distinct silos and golden images for each use case, the concept is to provide distinct “bolt-on” app layers that can be reused. For example, if a company maintains twenty distinct XenApp or XenDesktop images, there is overlap in the base operating system and application set in each. Rather than patch and update twenty gold images, it’s much easier to patch a single operating system layer or application layer when changes are required. As such, the components for XenApp and XenDesktop are selected as à la carte layers that can be reused. With cloud enablement availability and the personalization layer functionality in tech preview within only four months, the Unidesk acquisition has indeed proven successful thus far.

VMware has concentrated its acquisitions on infrastructure solutions, whereas Citrix has largely focused on enhancing XenApp/XenDesktop. So, what company or companies will Citrix and VMware look toward acquiring? With the dust settling from major changes in 2016 at both companies, acquisitions are likely to increase. However, the vetting process associated with acquisitions will likely get even more stringent, because there’s no room for error with expensive acquisitions.

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