A Light Reading piece asks an interesting question, which is what went wrong with Citrix. That’s surely interesting to people who use Citrix, or invested in it, but it might be even more interesting for the market. Not because Citrix is the cornerstone of anything in particular, but because the some of the answers the article proposes could just as easily be applied to other companies in the cloud, network, and software space.
Citrix is a company whose focus has been increasingly vague over the years. The company is into the cloud space, the SaaS space, virtualization, remote desktop, and more, but it started off as a remote access player and it’s fair to say that most of its products have stayed at least somewhat close to that theme. The LR piece notes that “It’s after all been two years when the entire universe seemed to work together to make it a good time to be a company in the working-from-home space. Instead, the company has spent the last five months pondering its future.” WFH, then, should have let Citrix make a killing, and it didn’t. The company spent months looking for an alternative future for itself, and failed, and so is now being bought. Right? No; oversimplified.
Remote access is an adjunct opportunity, for the obvious reason that it depends first on somebody providing something that needs to be accessed remotely, and second on that somebody failing to offer its own solution. If you dig back to the early days of Citrix, you find that much of IT was really focused on the headquarters location, with branch offices and outside personnel left out. This was the result of the way that the PC wave, launched by the IBM PC in the early 1980s, washed over companies. With the players in that headquarters-focused productivity wave ignoring remote locations, it’s not a surprise that there was an opportunity to extend the improvements to more distant workers, which Citrix played strongly in.
The presumption of the quote I cited above is that Citrix (as the article later says) “lost its way”, deviating from its remote-work roots at the very time they should have been doubling down. I don’t agree with that statement at all. The problem Citrix had was the “Novell problem.”
When PCs became a hit for the enterprise, they lacked any strategy for storage and printer sharing, for workgroup operation, and Novell came along with NetWare to provide it. This supported LAN-based disk and printer sharing, things enterprises who were committing to the PC really needed, and Novell took off and ran strongly for perhaps four years. Then two things happened.
First, there is a limit to how many bells and whistles you can hang on file and printer sharing. As the number of meaningful enhancements Novell could make declined, more users stayed with early versions rather than buying upgrades. That obviously hurt Novell’s revenue, and at that moment they should have realized they had a major problem, but they didn’t, apparently.
Second, Microsoft introduced disk and printer sharing as a standard feature for Windows. Novell’s specific enhancement was superseded by a general advance in capability. The broader Microsoft strategy became the right answer in a flash, and Novell was doomed.
Citrix’s issues really mirror the Novell story. Remote access has always been a transitory need, just as file and printer sharing for PCs was. Like Novell, Citrix focused on a tactical response to that truth, looking at one niche issue after another and broadening out to address it. Then along came the cloud, which was an irresistible force.
The problem for Citrix is the portal concept that’s emerged in cloud usage. The cloud front-end approach that’s really been driving hybrid cloud is all about managing the presentation of legacy application access. This means that the GUI for any legacy app is composable, and that you can make an application connection through the Internet no matter where you are. If that’s not the ultimate in remote access, what is?
Citrix didn’t fiddle while WFH heated up, it didn’t understand that WFH was going to be driven in a totally different direction by the portal concept and hybrid cloud. The Citrix delay that LR cites wasn’t a problem because it failed to focus on remote access, it was a problem because it didn’t identify a strategic direction for the company, beyond remote access. It wasn’t that they lost their way when CEO Mark Templeton left, but that they’d lost their way already (due, no doubt in part, to his own decisions) and didn’t find it in a replacement for him. Here, the article hits the truth: “This lack of strategic vision was compounded by having a short term CEO follow, Moscow-born Microsoft alum Kirill Tatarinov who served 18 months, during which he struggled to hit sales targets.”
Struggling to hit sales targets is what characterized Novell’s end of life. The lack of strategic vision characterized Novell from the first, but it became acute when symptoms of the workgroup networking shift turned up, and were ignored. Citrix has done exactly the same thing, which means that the new owners face a major issue now. Will they agree with the notion that what’s needed at Citrix is a renewed focus on remote access? That’s a heavy lift at this point, if it’s relying on Citrix assets, and there’s no time to create a new asset class built around the cloud/portal approach. Even if they could put out a portal-driven strategy, it’s already too late to exploit it because the portal shift is already a reality.
The important lesson here isn’t for Citrix, it’s for the rest of tech. We have an industry torn in two, with one “strategic” piece driven entirely by media hype and one “tactical” piece driven entirely by wanting to hit sales targets. Following either is going to lead to major problems for vendors.
We’re in the early days of the biggest transformation in information technology in decades. Networks are transforming, under the combined pressure of consumerization of broadband and the cloudification of applications, the latter being the same force that’s hit Citrix. The cloud is transforming applications and application development. Metro networks are going to be redefined by edge computing and metaverse, and the core will be redefined by metro-meshing and fiber. Virtual networks will dominate, especially evolved forms of SD-WAN.
I have to wonder whether the new owners of Citrix see all of this. I have to wonder how many vendors are ready for all of this. I have to wonder whether network vendors who race to become the “next Cisco” are racing to become the “next Citrix” instead. It’s going to be an interesting year.