Citrix’s Collaboration Business Offers Strategic Options
I wrote about Citrix being an acquisition target for Oracle recently on the grounds of their on-demand collaboration product suite. Since then, I did a bit of digging on the numbers for the Citrix Online business.
Whereas Citrix (NASDAQ: CTXS) is primarily an enterprise software company with:
* $1.134B revenue 2006
* 60 million users worldwide
* 180,000+ corporate customers
* 22% overall annual growth rate
Citrix Online is a much higher growth business with:
* $148.8M revenue 2006
* 23,000 business customers, largely focused on the SME segment, itself, a very high growth market
* 49% annual growth rate
Today, Citrix Online constitutes 25% of the Citrix business, and in Q1 2007, scored triple digit growth with $50 Million in revenues.
One of the reasons I have always liked the online collaboration space very much, is that it truly saves huge costs of doing business. Business travel is not only very expensive, it is also extremely tedious. Flying somewhere for a 2-3 hour meeting has just become an unpleasant experience due to waiting time, rampant flight delays, etc. It also thoroughly disrupts quality of life.
However, on the other end of the trend spectrum, we have globalization and outsourcing, and working with people elsewhere, on another continent, has become routine.
Web Conferencing and real-time collaboration, including desktop sharing, offers a very nice compromise between the two extremes - flying all the time, and not communicating enough. I expect, thus, that Web Conferencing and Real-Time Collaboration will become standard fare in every business workflow within the next decade, if not sooner. The Extended Enterprise trend makes it even more compelling.
Citrix Online is well-aligned with the market trends, and will probably become an even larger % of the overall Citrix portfolio within the next 18 months, offering up some interesting options to the company. One such, is to roll-up the Enterprise 3.0 players to build a larger SaaS play. A roll-up of Citrix, Rightnow, Omniture, Taleo, Concur, etc. would be an interesting way to consolidate the space, and for the time being, stave off Oracle.
Interesting take…With the outsourcing trend, this is likely to a growth area for some time to come…And the odd thing is that there are no open source based usable alternatives (except for VNC which is geeky) to the fee based service from Citrix and other people.
So their stock is indeed a good bet.