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Citrix looks like it has escaped 'not dead yet' status

It's growing, new products are flowing and Microsoft's sending it new punters

In 2015 Citrix was in trouble: the company fired 900 employees and warned it would miss guidance on earnings, endured a profit slump and cleaned out its C-suite.

While the company could still point to annual revenue grazing towards US$3bn, software companies don't often improve their health after bad years. With VMware offering direct competition in its hitherto-largely-untroubled application publishing business and the cloud a challenge to all enterprise software vendors, The Register's virtualization desk wondered if the company might be heading for “not dead yet” status.

What a difference a year has made: the company last week reported stable revenue, increased profits, growth forecast for 2017 and new products that deepen and broaden its offerings.

The numbers: $908 million in 2016's Q4, compared to $905m for the same period in 2015. For all of 2016, revenue of $3.42 billion, compared to $3.28bn for FY 2015. And net income of $536m, compared to $319 million the year before.

2017 guidance is for between $2.81 and $2.84 billion of revenue, which looks like a reverse but will actually represent growth because the GoTo business is about to be sold to LogMeIn. Citrix without GoTo did about $2.73bn in 2016, so there's modest growth forecast. Some of that will come from integrating the recently-acquired Unidesk, while the company's increasingly close ties to Microsoft aren't hurting its fortunes

CEO Kirill Tatarinov noted jumps in sales of key products in mobility and workspace services, up three or four per cent. The company also clocked up three quarters of consecutive growth for both its workspace services and Xen businesses, leading Tatarinov to declare that “it is clear that our efforts on innovation and execution are delivering solid competitive edge”. The previously-troubled Asia Pacific and Japan operations are growing again under new leadership. The NetScaler software-defined WAN products are picking up promisingly, albeit from a standing start.

All of those products have decent growth prospects. Application publishing is more relevant than ever before as organisations seek to get their apps into phones, tablets and BYOD devices. Workspace managers make it possible to publish those apps with sufficient security. Software-defined WANs are booming because telcos are the common enemy: wringing more performance out of internet links, without having to request or pay for changes, just makes sense. Xen Desktop is handy for those contemplating either desktop-as-a-service, or occasional desktop access on various devices. And let's not forget the consistent demand for desktop virtualization.

That this all runs in Azure, and does so with Microsoft both blessing and promoting Citrix as the way to mobilise apps and data, is also a very good thing. So was Microsoft's decision to kill off its own RemoteApp and instead tell would-be buyers to call Citrix.

Acquiring Unidesk will also give Citrix a boost, as its layering technology should make it possible to deliver virtual desktops and apps in different, and more lightweight, configurations. It's also got a strong toehold in hyperconvergence, as Nutanix is happy to bundle Citrix with its kit. There's also the beginnings of a container strategy in view, with the release of a containerised version of NetScaler.

No wonder Tatarinov therefore believes “2016 was a transformational year for Citrix where we focused on our core products and made significant strides advancing our long-term vision, strategy and culture.”

There's even enough cash around for a $500m boost to the company's stock repurchase program, which now plans to retrieve about $1.4bn of scrip.

Which is not to say all is rosy. The company's clearly been bruised. It's not hard to imagine that the mobile workspace market is going to top out in not many years, once on-premises apps get the treatment and more and more organisations move to natively-mobile-friendly SaaS applications.

But Citrix is clearly in a far better place that it was in 2015, and a better place than it looked like being able to attain. Now all it needs to do is hope wasn't a fluke and keep getting things right … forever. ®

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