know-how corporations, in particular these with an endeavor bent, seem like coming under increasing force from activist traders who want to squeeze out profits at the price of products and jobs. final yr EMC pressed with the aid of an activist investor ultimately offered the corporate to Dell for $ 67 billion. Citrix is the most recent company dealing with this issue –and from the identical investor because it turns out.
It’s been a busy week for Citrix, a company desirous about computer virtualization and networking. simply yesterday, it bought its cloud administration products to Accelerite, and on the same day introduced that it had received Comtrade’s SCOM management packs for Citrix customers.
What these strikes exhibit is that Citrix is in the midst of a pivot where it is attempting to shed merchandise that it sees as out of doors of its core mission, while making the occasional acquisition to reinforce that mission. that means merchandise like Citrix CloudPlatform and CloudPortal industry supervisor are out of here and the Comtrade SCOM administration packs are coming into the fold.
remaining November, the company introduced it used to be spinning out its GoTo products equivalent to GoToMeeting, GoToMyPC and different merchandise right into a separate company.
There are additionally layoffs concerned here with 1000 jobs expected to be cut from the GoTo transfer by myself. the company had over 9000 workers worldwide prior to the layoff announcement.
Citrix has indicated it desires to be aware of core merchandise corresponding to XenServer, NetScalr and possibly Citrix place of job Cloud, but it’s no longer necessarily making these strikes as a result of it wants to change course.
instead, it seems that Citrix is under power from activist investor, Elliott management. if you’re no longer accustomed to Elliott, they are the identical agency that sold a $ 1 billion stake in EMC in 2014, and straight away commenced striking pressure on the corporate to promote its 80 % share in VMware. sooner or later EMC sold the whole firm including the VMware piece to Dell for $ sixty seven billion. That sale is predicted to close later this 12 months.
In a case of ‘Deja vu all over again’ Elliott has taken an activist investor role with Citrix as smartly, pushing the corporate to make some moves it will not essentially have made otherwise.
These are usually not the one tech corporations wherein Elliott has proven passion. As eWeek said in October, Elliott has its fingers in numerous tech offers. The MO is continuously the identical. Elliot buys a stake, then secures a couple of seats on the board and starts pushing for substantive adjustments in route.
The query is why an individual fairness agency like Elliott is all of sudden smitten with these huge undertaking tech companies. R Ray Wang, who’s foremost at Constellation research says it’s because it could possibly extract some cash from them.
“the personal fairness companies are concentrated on tech companies as a result of their increase rates of 10 to twenty percent could seem sluggish for tech, however are excessive [compared to] different industries. they’re in the course of squeezing these firms for cash and forcing M&A across the board,” Wang instructed TechCrunch.
EMC sold the company before it was once forced to make different moves it didn’t actually want to make. Citrix wasn’t so fortunate, dumping product strains, chopping jobs and far more. These companies can be the start of other equivalent process with the aid of traders like Elliott as huge tech companies below force from smaller, more nimble rivals turn into targets of all these firms.
Citrix didn’t respond to a request for remark prior to we published this piece. if they do, we will replace the story.
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