Citrix Systems takes connectivity to the next level. The company makes network access devices and software designed to enable PCs, IP phones, smartphones, and other devices to remotely and securely access applications across wired and wireless networks, freeing customers from the difficult and costly task of installing and updating software on each piece of hardware. Its product line includes application virtualization software (XenDesktop), network access devices (NetScaler), cloud computing connectivity and aggregation applications (CloudStack), and online meeting software (GoToMeeting). Citrix also offers managed online services for meetings and presentations, technical support, and remote desktop access.
Florida-based Citrix rings up about 45% of its revenue from outside the US. The Americas (the US, Canada, and Latin America) is the company's largest market segment, accounting for about 60% of sales, followed by Europe, the Middle East and Africa, representing about 30%. The rest comes from the Asia-Pacific region, the company's smallest but fastest-growing market.
Citrix divides its business into two reportable segments: Enterprise (primarily consisting of desktop, data center, and cloud products) and Online Services (consisting of Web collaboration, remote access, and support services). The Enterprise division accounts for 80% of sales, while the Online Services unit brings in the rest.
Sales and Marketing
Citrix markets and licenses its products and services through multiple channels worldwide, among them value-added resellers (VARs), independent software vendors (ISVs), direct through the Web, and original equipment manufacturers (OEMs). These distribution channels are managed by Citrix's global sales and services organizations, which provide training and certification to integrators, VARs, and consultants for products and services. One distributor, Ingram Micro, accounted for 16% of Citrix's net revenues in 2012.
Its products and services are geared toward customers of all sizes, including consumers who subscribe to its GoToMyPC remote access service (remote access), network engineers who purchase its NetScaler Web application devices (cloud networking), and IT professionals who license its XenDesktop infrastructure products (desktop virtualization). Citrix targets such customers as CIOs, desktop operations managers, IT infrastructure managers, network architects, and server operations managers, as well as small business and individuals. Key enterprise clients have included Deutsche Bank, KT Corporation, and Royal Bank of Scotland.
Citrix reported sales of $2.6 billion in 2012, a 17% increase versus 2011. The double-digit gain was driven by increases in product and license revenue (up 12%) on rising sales of networking and cloud products led by NetScaler and ZenDesktop, software as a service sales (up 19%), license updates and maintenance revenue (up 20%), and revenue from professional services (up 30%). Despite the revenue gain, operating income fell 6% to $390.8 million. Citrix's revenue has more than quadrupled over the past decade, while profits has risen in eight of the past 10 years.
Citrix maintains control of all purchasing, inventory, order processing, and accounting functions. It employs independent contractors, such as Flextronics, Hewlett Packard, and Super Micro Computer, for manufacturing of certain products, which allows for better flexibility in meeting customer and delivery requirements. Citrix also maintains a number of technology collaborations and licensing agreements with the likes of Microsoft and Cisco to speed up the development of existing and pipeline products.
Citrix continues to introduce new versions of its products to address new market niches. The firm is focusing on products and services that help customers adapt and manage mobile work styles and build cloud infrastructure through both new products and expanding its consulting and technical support service capacity. To that end, in 2012 Citrix introduced XenMobile MDM, which provides role-based management, configuration, and security of corporate and employee-owned devices, and Citrix CloudGateway, a unified service broker that aggregates, controls, and delivers Windows, Web, Software as a Service, and mobile apps to virtually any device,
Also, the company regularly uses acquisitions to broaden its product line and expand into complementary markets.
Mergers and Acquisitions
In early 2013 it acquired Redwood City, California-based mobile device management (MDM) leader Zenprise. Citrix plans to integrate Zenprise with its own products to form a single, integrated enterprise product line for managing mobile devices, apps, and data.
Earlier in 2012 Citrix bought privately held Podio, a developer of cloud-based collaboration applications. The acquisition was made to enhance the company's "GoTo" range of cloud products. The same year Citrix also bought online IT service desk technology provider Beetil, another purchase that expands its growing portfolio of cloud-based applications. Also in 2012 Citrix acquired Bytemobile, a global provider of data and video optimization applications for functions such as content caching, policy control, mobile analytics, and traffic management.
In 2011 Citrix bought Germany-based software-as-a-service (SaaS) provider Netviewer to expand its online services presence in Europe. Netviewer served clients in a range of industries in Austria, the Benelux region, France, Germany, Italy and Spain, Switzerland, and the UK. Citrix also bought Kaviza and RingCube in 2011, adding desktop virtualization technology that complemented its XenDesktop product line.
Additionally, Citrix acquired open source software developer Cloud.com that year to address the growing market for cloud-based computing services. Cloud.com specialized in applications used to build, deploy, and manage multi-tier and multi-tenant cloud software systems. In 2011 the company also bought ShareFile, a developer of software that enables businesses to securely transmit large files via the Web, that competed with Dropbox, Box.net, and YouSendIt.