Introducing the new Citrix

CEO Kirill Tatarinov outlines the company’s position and new focus

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Kirill Tatarinov took over as CEO of Citrix in January, a key piece of a company reorganization demanded by activist investor Elliott Management, which had acquired a 7.5% stake in Citrix.  Tatarinov, a 13 year veteran of Microsoft, where he was most recently Executive Vice President of the Microsoft Business Solutions Division, is putting the finishing touches on the company’s new plan, which will be introduced at the company’s large user conference in May, but he shared a preliminary glimpse with Network World Editor in Chief John Dix.

Citrix CEO Kirill Tatarinov

Citrix CEO Kirill Tatarinov  

Where do you stand with the company reorg?

We’re pretty clear about the worldview and how we sit in it.  The details, as you may imagine, are still forming.  I’m not done with my discovery and formulation process just yet.  I would say I’m probably two-thirds into it.  But most of what I’m hearing has started to be reoccurring, which means it is a good time to start formulating what’s next and I think it’s not long from now when we are going to be able to articulate it crisply, and we have a perfect opportunity for that, our annual Synergy user conference at the end of May. I would say that will be the coming out of the new Citrix.  That’s how we consider it. 

You’ve announced you are spinning out of the GoTo stuff, but that hasn’t happened yet, right?

It’s on the path.  We came out mid-November articulating the plan, but spinoffs of that magnitude take time. It’s about a $700 million business and it is a couple thousand people scattered around the world, and while it has been run as a stand-alone organization for a long time, there are still common processes that have to be addressed. Things like setting up separate instances of ERP, the HR processes, all of that.  It’s not as easy as people think.  But the plan is to have a separate public company that will have its own board of directors. The ownership will be shared, at least for a period of time.  But they will be run as an independent company.

You folks sold off the cloud platform business as well.

We sold several elements of cloud portal management in an effort to focus the company.  That was a very consultative type business, very services heavy, and we’re not exactly a professional services type company.  We have a small professional services organization, but the fact that it sold to a professional services company tells you where the focus needs to be.

Speaking of focus, outline for us Citrix’s new position.

Citrix is focusing on the secure delivery of apps and data. With that we have four core areas:

* Virtualization. A foundational element, which is essentially how Citrix got started many years ago, is the access point that people use to get virtualized apps and desktops. This business has more than 400,000 customers. It is an amalgamation of core elements: applications, virtualization, desktop virtualization and delivery.  And now, as we plan for the future, we are embracing new ways people can access their virtualized apps and desktops through the cloud. 

There’s a clear and continuous shift and demand for complete end-to-end delivery from the cloud and we’re watching that closely. For example, we give customers a choice of keeping the virtualized desktops on premise or hosting them with a partner or putting them in Amazon’s or Azure’s cloud, and we’re still analyzing how this can be best optimized for future customers. 

* Mobility. Another core pillar for us is mobility, which is tightly aligned with app and desktop virtualization. All of our products enable customers to be mobile and secure, plus we have specific products in the market. We have an enterprise mobility management suite called XenMobile.  The most critical part of enterprise mobility management is mobile application management, which essentially allows people to bring their own devices and access corporate applications and data, which can all be supported by IT. This enables IT to help secure the business and users by controlling what users can store, how they can store it, how they can wrap it, how they can access it, and what they can access.  That’s very important and an interesting area of focus for us. Plus, we also support the full IT-controlled mode of MDM as part of our mobility management solutions.

* Networking. The third area of focus is our networking business, which includes our NetScaler platform. The solution we have spans several key network elements:  it’s an ADC, a gateway and it is a software-defined WAN. It’s software so it can be deployed in different ways. It can also tie together with our Xen family, both in XenApp and XenDesktop, optimizing access, and it integrates with XenMobile. As an example, together XenMobile with NetScaler let us provide something called a MicroVPN that enables you to create VPNs on a per app basis. Going back to the mobile application management scenario, if for example, a device is not enrolled, is not managed, and there is no VPN available, we can support a microservice that manages and secures access for individual apps. This is enabled by NetScaler and is something only Citrix can do.

The networking business is also a category we’re excited about because of independent go-to-market initiatives. We’ve been very successful enabling at-scale cloud operators. And we have a similar phenomenon in large enterprises driven by e-commerce.  Five years ago you could say e-commerce was the domain of people who were selling consumer goods.  Now it’s the domain of every large company that needs to serve the online engagement needs of their customers, whether it’s selling or just customer engagement. All of these scenarios need secure and reliable network connections.

* File Sharing. The fourth area of focus for Citrix is secure file sharing.  What it unique is that it is file sharing for professionals at small and large businesses, contrasting with other solutions.  This is not a consumer oriented business trying to serve enterprise requirements, and we’re not trying to serve the needs of both consumers and businesses.  It’s exclusively focused on business.  And even though businesses share files with consumers, it is the business owner who essentially controls the access, and we’re providing a secure solution that was developed for business.

We also have some unique differentiators, with features that are important for file sharing. For example, we have support for signature technology.  Not only can you share a file, you can share a file with an associated action, like a signature.  It also has built-in workflow, which is not common for other data sharing competitors

We are very focused on these four pillars, but most importantly, the pillars work together which is important for our customers. This is clearly the case where the whole is bigger and better than the sum of the parts and the four units work in conjunction with each other for the secure delivery of apps and data.

You mentioned cloud, do you see that as the future?

Everything we do has both on-prem and cloud options.   While we absolutely see rapid adoption of the cloud, about half of our customers continue to maintain, and will for many years to come, their on-prem deployments, and we want to give them that option.  We will lead with the cloud.  We will encourage them to go to the cloud, but on-premise is certainly something we will continue to offer. 

Do you have a sense about the timing, when cloud will really take over?

The previous business I ran included ERP and CRM software and there were very clear renewal cycles.  For ERP it’s 15-year renewal cycles.  The previous renewal was in 2000 and the next renewal is happening right now.  That’s ERP.  What we’re analyzing here is, what is the renewal cycle for application and desktop virtualization infrastructure?  Is it three-years, five-years, ten-years?  Organizations going through that renewal cycle now want to go to the cloud, or at least want to experiment with the cloud to see how it works.  But it’s absolutely real.  People have seen benefits and real cost-savings.

 

Going back to your product mix, I presume Workspace still accounts for the bulk of sales?

Workspace is still the core of Citrix.  It’s the largest segment.  This is where we have the most customers.  It’s back to growth and we want to continue to accelerate that growth. NetScaler is the second largest and ShareFile and Enterprise Mobility, they’re emerging but they are high growth.

If someone wants to buy some components but use their existing network kit instead of brigning in NetScaler, is that possible?

Well, we don’t require it, but if you want certain capabilities you can only get them through NetScaler.  If you’re buying XenMobile and you want MicroVPN for applications management, you need NetScaler.  Most people would have a variety of ADC vendors with a range of applications.  When you go into a large company you’ll find F5, A10, NetScaler, and they would be all playing their own game. 

In NetScaler we are a relative newcomer. We want to make it better known and we want to make sure people understand that we are a networking business, and that networking helps us drive the rest of our business.  In many cases, NetScaler is an enabler for XenApp and Desktop or for XenMobile.  It allows us to get our foot in the door and then expand, a land-and-expand strategy.  You come in with a suite, you demonstrate success and then you go beyond that.  I’m starting to see that as a trend.  

 

As described by you, the pieces you are focused on fit together neatly, while it wasn’t always possible to say that about Citrix.

Citrix has been a product company and very good at pitching individual products to IT implementers.  That’s been the target audience for many, many years.  I think we’ve outgrown that mode of operation and must now articulate our end-to-end vision and strategy and engage more with IT decision-makers and business professionals to articulate how Citrix actually enables digital transformation. 

What work still needs to be done? Is it product development? Getting the team to work better? 

It’s a combination of factors.  It’s establishing one Citrix where everything works to the same blueprint.  This has been an ongoing discussion with the team and our ecosystem and is absolutely part of what we need to work on. We need to set up common operating principles.  We need to establish a common framework for mission strategy and lay the groundwork for teamwork.

The analogy I use with my team is, we have a great structure that needs maintenance and a bit of renovation, but it’s a great foundational structure and we absolutely want to move it forward.  We have an amazing culture and a tremendous amount of support from customers. People genuinely want to see Citrix succeed. 

Do you think most people still associate the bulk of the company with virtual desktops? 

Absolutely. We’ve done a number of surveys and that’s what every external survey reinforced.  Citrix is an incredibly trusted brand.  People really like working with Citrix.  People know Citrix for one or a couple of things and they don’t understand the longterm vision and strategy and that’s what we need to explain.

You read about CEOs coming in with 100-day plans or something similar.  Do you have a calendar like that?

There are logical milestones which drive a number of things we’re working on, like our user conference at the end of May.   But what’s driving the urgency in my actions is getting us on a different growth trajectory for 2017.  To make that happen, the groundwork needs to be happening right now so we can complete the planning through the end of the year. 

In terms of competition, you’re in some distinctive markets but who do you view as your top competitor?

If think it’s pretty hard to find somebody who provides this complete end-to-end value.  I would never say Citrix is unique in what we do, but this amalgamation of four elements does give us an ability to offer a unique value proposition.  But there are competitors in every category.

How about VMware?

Well, they square up directly in the virtualization area, and I think over the years they have made a lot of claims, some true, some not, and to a degree Citrix has been soft in our approach to competition, but we are seeing some good wins.  We are seeing good momentum.  We see some very interesting takebacks and we are going to be more vocal about those.

Microsoft is a Citrix partner, but as they push their tools into the cloud and make it possible for me to access those resources from anywhere, why do I need Citrix?

First of all, you need to bring your past into the future, and that’s one aspect of what we do.  Networking plays an important role.  Microsoft is a big customer of NetScaler because it enables some key scenarios that, frankly, Microsoft doesn’t have. 

And even for applications considered to be modern, many customers want to run them in virtualized mode.  Take Skype for Business.  Microsoft aspires to have Skype for Business as a native experience on any device, but many large enterprises have significant control requirements.  They want Skype for Business wrapped, run centrally and delivered to devices through a Citrix receiver, and that’s a very strong partnership we announced with Microsoft in January.

Does the adoption of other SaaS applications reduce or increase the need Citrix?

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