Citrix buys GoToMyPC maker for $225 million

Remote access software maker Citrix Systems Inc. is making a splashy play to move beyond the enterprise market, announcing Thursday an agreement to buy Web-based desktop access developer Expertcity Inc. in a US$225 million cash-and-stock deal. Pending regulatory approvals, the deal is expected to close in early 2004.

Six-year-old Expertcity's claim to fame is GoToMyPC, a service offering browser-based access to remote PCs. Easy to set up and priced starting at US$19.95 per month, the service has attracted more than 100,000 customers, primarily home and small-office users.

Citrix will maintain the GoToMyPC brand and allow Expertcity to continue operating out of its Santa Barbara, California, headquarters under the leadership of current Chief Executive Officer (CEO) Andreas von Blottnitz, Citrix CEO Mark Templeton said in a conference call with analysts.

Citrix, based in Fort Lauderdale, Florida, makes server software that allows companies to centrally manage applications for their end users. Ubiquitous in large companies but nearly unknown to consumers, the company hopes to use Expertcity to tap markets untouched by its expensive enterprise products.

Citrix also hopes to accelerate Expertcity's drive to be taken seriously by businesses. Expertcity claims 4,000 corporate clients, including Verizon Communications Inc. and Cisco Systems Inc., but analysts said GoToMyPC is essentially a consumer service that occasionally shows up in workplaces as a departmental solution.

"I look at Expertcity as a real dark horse in the corporate remote access space," said Zeus Kerravala, vice president of research firm Yankee Group Inc.'s enterprise infrastructure group. "From a customer perspective, I can see where Expertcity could play in the enterprise market, but they haven't historically."

The acquisition could prove a cultural challenge for Citrix, which has never before dealt with supporting home and small-office customers, Kerravala said. He also foresees a potential for conflicts in the company's network of partners and channel resellers.

"They will now start competing with SSL (Secure Sockets Layer) VPN (virtual private network ) vendors," he said. "Citrix has never really been a competitor to anybody. They've been a partner to everybody. Now they'll be friends to some people and an enemy to others."

SSL VPN systems are attractive to companies that require a high level of security for remote access to enterprise applications and data. Citrix sees GoToMyPC, which is not an SSL VPN, appealing to a different market, said Citrix Senior Vice President of Corporate Development Dave Jones.

Citrix does not expect to alter GoToMyPC's pricing or service in the near future, Jones said.

"We're going to run it as a separate business and look for synergy," he said. "Our focus initially will be to introduce them to our channels and our alliance partners, and our large base of enterprise customers."

» posted by abennett

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