Our thoughts on the Citrix acquisition & TIBCO merger
Citrix, the ubiquitous virtualization company, is to be acquired for $16.5 billion by “Vista Equity Partners” and “Evergreen Coast Capital” – the latter being an affiliate of “Elliott Investment Management”.
The fact Citrix have been acquired isn’t a surprise… I’ve been expecting it for years but always thought it would be Microsoft or VMware (or someone similar). 2021 was something of a difficult year for Citrix and saw their CEO, David Henshall, leave after four years. Could it be that Microsoft, historically a key partner with Citrix, adding first “Azure Virtual Desktop” and then “Windows 365” has put added pressure on Citrix’s business? On paper, one would expect that Citrix would have done well throughout COVID-19 and the huge upsurge in remote working and access that created.
Evergreen & Vista
Who are these private equity companies and what do they want with Citrix? Well, you may recognise the “Elliott” name as they are/have been involved with various software companies (either directly or via “Evergreen”) including:
- Logmein (which acquired GoToMeeting from Citrix)
- Micro Focus
And they have been a Citrix shareholder since 2015 & also have a slice of Oracle. Interestingly, the new Citrix interim CEO, Bob Calderoni, will be their 3rd in 7 years since Elliott bought into them – more than the previous 20 years.
Looking at Vista, familiar companies currently in their portfolio include:
So there’s a pretty strong technology focus as you can see.
Citrix & TIBCO
It has been confirmed that the new owners intend to merge the Citrix and TIBCO portfolios. They see the combination of TIBCO’s data and analytics capabilities and Citrix’s secure workspace and app delivery abilities as the way forward for hybrid organisations. According to their press release, this will result in:
“one of the world’s largest software providers, serving 400,000 customers, including 98 percent of the Fortune 500, with 100 million users in 100 countries”
That will be well positioned to:
“advance hybrid cloud IT strategies and meet the needs of the modern enterprise”
It’s clear they’re looking to turn two legacy companies into a combined force for the new way of work that has accelerated since 2020.
Given that roughly half the companies mentioned in this article are known for their licensing audit tactics, and TIBCO are one of them, it’s hard not to look at this and think about audits. Will they be used as a way to quickly start recouping some of that $16.5 billion via audit penalties and to find opportunities to add more software into existing customers?
Many organisations will have had this software installed for several years and there’s a very good chance that, especially during the upheaval of COVID, TIBCO and Citrix licensing may not always have kept up with new ways of working and deploying software across remote and hybrid organisations. Look at number of users, types of licenses, region differences etc. as a starting point.
Conversely, that’s not the best way to build a viable, progressive, modern software business so perhaps they’ll stay away from those tried and tested tactics in order to build something successful and new for 2022 and beyond. Perhaps rather than focusing on incorrect TIBCO or Citrix licensing, the new entity will take an approach focused on looking forwards, not backwards.
Whatever your view, it seems sensible to ensure your compliance position around TIBCO and Citrix licensing is up-to-date – just to be sure!
- Tags: acquisition · audit · Citrix · Future of ITAM · licensing · TIBCO
About Rich Gibbons
A Northerner renowned for his shirts, Rich is a big Hip-Hop head, and loves travel, football in general (specifically MUFC), baseball, Marvel, and reading as many books as possible. Finding ways to combine all of these with ITAM & software licensing is always fun!
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For an in-depth look at the risk such mergers pose see this recent article from Beeman & Muchmore LLP on the wider problem of so-called software license trolls.