At the end of January, Citrix annouced that Vista Equity Partners and Evergreen Coast Capital were planning to acquiring it. The $16.6bn deal will mean Citrix’s line of workplace and virtual desktop integration tools will become part of the Tibco product portfolio.
The deal appears to have been driven by Citrix’s new CEO, Bob Calderoni, who only took over in October 2021.
In his first earnings call briefing after becoming CEO, in November 2021, Calderoni was asked specifically about divestiture. At the time, no one anticipated that Citrix would go all out and be sold to a private equity firm.
According to a transcript of the earnings call, posted on the Seeking Alpha financial blogging site, Calderoni said he felt “good” about the three main businesses Citrix operated – VDI desktop as a service (DaaS), its cloud-based content collaboration platform, and the application delivery controller (ADC) products it acquired when it acquired NetScaler for $300m in 2005.
At the time, Calderoni said: “We are investing in ADC as a service and we’ll continue to do that. I see ADC as an important part of our VDI and DaaS solutions. So we’re largely going to stay in those three businesses. But like every company, there are always investments that are being made around the edges of all of that stuff and sometimes those investments are synergistic to what we’re doing.”
But less than three months after he made those remarks, and just four months in as the new CEO, Calderoni has spearheaded a transition that sees Citrix become a private entity within the same group that owns Tibco.
Announcing the company’s transition in January, Calderoni said: “Today’s announcement is the culmination of a strategic review process conducted over five months, including extensive outreach to both potential financial and strategic buyers.”
According to Calderoni, becoming a private company will enable Citrix to transition into new areas as it strives to provide products and services to meet the appetite for digital transformation required by IT buyers.
“Together with Tibco, we will be able to operate with greater scale and provide a larger customer base with a broader range of solutions to accelerate their digital transformations and enable them to deliver the future of hybrid work,” he said. “As a private company, we will have increased financial and strategic flexibility to invest in high-growth opportunities, such as DaaS, and accelerate its ongoing cloud transition.”
The deal pulls in Vista Equity Partners, which owns Tibco, and Evergreen Coast Capital Corporation, an affiliate of Elliott Investment Management. Elliott was behind EMC’s plans to spin out VMware, which later led to Dell’s $67bn purchase of EMC in 2015.
In a blog discussing the Citrix acquisition, Forrester senior analyst Andrew Hewitt said the deal would expand the size of Citrix’s customer base to over 400,000. But for Hewitt, the key strength of the deal is the potential for Citrix’s DaaS to scale out business intelligence and analytics tools within Tibco’s portfolio.
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“According to our research, penetration of enterprise business intelligence applications has been hovering at about 20% for the past decade,” he wrote. “There are multiple ways to increase the adoption, but one of the techniques is to embed analytics or data-driven signals in digital workspaces (which is what Citrix provides), where these decision-makers ‘live’ during their office hours, so there is also benefit for Tibco.”
Last December, Reuters reported that Vista pulled out of a bid to acquire Blue Prism, for $1.63bn. This deal would have given Tibco what its CEO, Dan Streetman described as “access to intelligent automation capabilities”. But without the RPA from Blue Prism, there will be questions over how Tibco gains access to such technology.
However, there is potential for Tibco to become a one-stop shop for the tools that enable intelligent, data-driven decision-making in business. Its portfolio already offers API management, messaging and data integration through its integration platform as a service (iPaaS), along with tools that support business process optimisation.
Tibco positions itself as an enterprise data company. Its product suite supports ingestion of multiple data sources and use of advanced analytics to drive business processes automation.
In October 2021, Tibco was rated as “a leader” in Gartner’s Magic Quadrant report for enterprise integrated platform as a service. Commenting on the rating, Randy Menon, senior vice-president and general manager, Connect and Tibco Cloud at Tibco, said: “Our cloud-native iPaaS solution simplifies and accelerates event-driven APIs and integrations, optimising the automation of business processes. This is a critical link for businesses driving a digital transformation strategy.”
Although Gartner classifies Tibco as a leader, the report’s authors warned that many potential customers are not always as familiar with its iPaaS. They also found that some customers expressed difficulties in finding skilled resources from Tibco to help them deploy, maintain and expand implementations as they become more complex.
“Buyers expressed that improvements are needed to address line-of-business and non-technical users, as they are increasingly seeking self-service capabilities,” said the report.
The deal with Citrix has the potential to expand Tibco’s footprint in enterprise software. If data is truly going to be the new oil, then it will be increasingly important for IT departments to integrate heterogenous data sources, offer simplified access to data and dashboards, and enable the business to drive automation.
All the key elements are there – the only question is whether Tibco can pull all the pieces together into a coherent vision to deliver a platform for enterprise business intelligence and advanced analytics.