Citrix Systems, a Fort Lauderdale, Fla.-based company with a wide international reach, has built itself into an important player in the highly competitive information-technology sector, recently posting strong growth in revenues, profits and employment.
Last year alone, Citrix added 1,300 employees to its worldwide workforce, an increase of more than 23 percent, bringing the total to approximately 7,000 today. About 1,500 people work at Citrix’s main office in Fort Lauderdale, and the company also has its Latin American and Caribbean headquarters in Coral Gables, Fla.
Citrix in 2011 logged record-high net revenue of $2.2 billion, a 17.7 percent increase over 2010, and record net profits of $356.3 million, 28.6 percent higher than the previous year. Cash flow from operations was $679 million last year, compared with $616 million the prior year.
With more than 230,000 customers worldwide, about 45 percent of revenues came from the Americas, 26 percent from Europe, the Middle East and Africa, 9.5 percent from Asia and 19.4 percent from online services, such as GoToMeeting, GoToTraining and remote IT support. Citrix’s revenues are derived from product licenses, license updates, software as a service, and tech services.
The expansion of mobile devices all over the world plays a key role in Citrix’s growth plans.
“In computing, mobility used to be the exception,” said David J. Henshall, the company’s chief financial officer and executive vice president of operations. “Now it has become the rule.”
With the explosive growth of smart phones and tablets, more and more companies and individuals worldwide embrace mobile work styles and cloud-based computing services that allow people to be as connected and productive outside the office as they are in the office using a company network and computer, said Henshall, a Colorado native who has been CFO at Citrix since 2003.
Meeting the burgeoning demand for mobility at the corporate, small-business and personal levels is a driving force at Citrix.
“We enable the mobile work style and cloud computing,” Henshall added. “We enable people to work and play from anywhere using any type of device.”
Like cable and satellite TV, which collects an enormous volume of signals from all over the world and sends them to individual customers, Citrix securely facilitates transmission of data and Internet applications to its customers wherever they are located, and on virtually any device.
Led by CEO and President Mark Templeton, Henshall and other members of Citrix’s executive team continue advancing a corporate strategy that includes in-house technology development and innovation as well as an aggressive acquisition program that provides new technology and market access, plus expansion of the company’s business in mobility and cloud computing. Last year alone, Citrix acquired six companies and bought a stake in another, costing the company about $472 million, according to the company’s SEC filing.
Partnerships also play an important role in its strategy – more than 10,000 companies resell, host and support Citrix products and services in 100 countries, providing the company with input on what the market requires. These partners include Microsoft, IBM, HP, Intel, Cisco, Dell, Amazon Web Services, Oracle and SAP, some of whom are also competitors.
While most of the stock analysts who follow Citrix give the company high marks, some are concerned that its outlook for growth in a key area, desktop virtualization, may be too optimistic.
Founded in 1989, Citrix develops and sells software, data center hardware and software as a service, or SaaS – that is, on-demand software. The company has grown with and adapted to changes in Internet technology throughout the years.
Beginning as a struggling software company in South Florida with 18 employees, Citrix now has become a major player in the IT sector, with a wide range of products and services, an international customer base and R&D centers in the United States, including Silicon Valley, as well as in India, Australia, China and elsewhere.
About 80 percent of the publicly traded company’s customers are large businesses, including Fortune 500 companies, while the remainder is small- and mid-sized businesses, professionals such as lawyers and accountants, and individuals.
Among its partners, Citrix and Microsoft have a close and long-standing relationship dating back to Citrix’s early years. In 1997, for example, a marketing, development and licensing agreement with Microsoft provided Citrix with an important cash inflow – $175 million in royalty and other payments over time. Just the year before this agreement, Citrix’s net revenues were $44.5 million. Henshall said that Microsoft has been the company’s “most important partner for about 20 years.”
Using desktop computers or PCs often means that businesses have to invest in desktop or mobile computers and servers, buy and install software, staff an IT department/help desk, train and support users, upgrade software and maintain the system. About 80 percent of IT expenses usually involve maintenance, Henshall said.
Citrix and other companies offer desktop virtualization, which means that the operating system, applications and data are decoupled from the PC’s hardware and shifted to a data center, where they can be secured, managed and updated from one location.
XenDesktop is Citrix’s virtualization solution for large businesses and a leading product. It converts Windows desktops and applications into an on-demand service for PCs, Macs, tablets, smart phones, laptops and “thin clients,” or computers that rely on a server to carry out processing. Help desk, security and backup for all desktops can be run from the data center, and companies can either replace obsolete PCs with low-cost thin clients or continue using existing PCs with XenDesktop and spread out IT costs over a longer period.
Citrix’s desktop virtualization products, which are also available for small businesses, offer several advantages, Henshall said. “XenDesktop simplifies infrastructure, reduces hardware and maintenance costs and increases productivity by allowing workers to use any type of device anywhere.” Applications and data are delivered securely to users, and companies also enjoy environmental benefits, he added, since they require less space and cooling for servers.
An engineer can work remotely in the middle of a desert and securely access any applications and data on a laptop or tablet, the CFO noted. And if the computer is lost or damaged, the data remains at the corporate data center, not on the device in the field.
Another popular Citrix product is GoToMeeting, which allows a user with a PC or Mac and an Internet browser to host high-definition video conferencing at small or large companies. Participants can join meetings anywhere from PCs, Macs, iPhones, iPads, Android smartphones and tablets.
An organizer first clicks to open the meeting, then invites others by phone, email or instant message. Each participant can choose to use the computer’s microphone and speakers or call in, and the organizer can show participants a specific document, webcam video, the organizer’s own screen or an application. Participants can see the organizer’s screen, document, etc. and attendees can obtain screen control. The screen being presented also can be changed.
Customers can arrange an unlimited number of meetings by paying a flat rate. Fees vary depending on the number of participants. As an example, a small company with one organizer and up to 15 participants would pay $49 a month or a discounted $468 per year. Each additional organizer pays a fee, but prices are adjusted for multi-user accounts. Large companies would be able to designate hundreds or thousands of organizers but would pay a much lower fee for each organizer.
Citrix also offers other related products, like GoToTraining, GoToAssist (an online, remote technical support product), GoToMyPC (an online product that provides, secure, remote access to PCs and Macs from iPhones, iPads and Android-based tablets) and ShareFile, which allows any size businesses to securely store, synchronize and share business documents and files from a cloud.
Citrix products are used in a wide variety of areas. For example, when people go to major websites like Google, Yahoo, MSN and Amazon, they are interfacing with these sites through a Citrix system. Depending on product lines, Citrix competes with a number of companies, including VMware, F5 Networks and Cisco (with whom it also has a strategic alliance).
Orlando-based CNL Financial Group, a private investment management firm that handles global real estate and alternative investments, has been working with Citrix for more than eight years and made “a significant investment” in Citrix solutions a year and a half ago, said Joel Schwalbe, the company’s senior vice president and chief information officer.
“We had been a customer, and we went out and looked at the market and decided that Citrix had by far the best solutions at the best prices,” Schwalbe said. CNL has been using Citrix’s XenApp and is deploying XenDesktop in stages. The company wants to have employees use devices other than PCs and be able to access information from wherever they are. It works with a private cloud powered by Citrix products and using Cisco servers.
“We deal with confidential financial data and it must be secure,” he noted. “Working with Citrix has saved money over the short and long term, and makes the IT team more efficient. CNL grew last year, but we did not have to expand IT – we realized savings across the board in infrastructure and people.”
Baptist Health, a group of hospitals, primary-care and specialty centers serving Northeast Florida and Southeast Georgia, uses Citrix services and XenDesktop to stream the desktop operating system to thin clients, which has helped limit initial deployment costs, Kevin A. Porter, manager of infrastructure systems at the Baptist Health System, said in an email. Under the old system, the hospital’s IT department would have to push out application updates to each workstation. Baptist has close to 6,000 computers.
“Our current deployment of XenDesktop enables physicians to have a consistent and controlled method for accessing our electronic medical records system on their personal devices,” Porter added. In clinical areas of Baptist hospitals, XenDesktop is used on battery-powered WOWs (wireless on wheels mobile work stations).
Citrix shares have done well so far this year, up about 26 percent.
Out of 33 analyst recommendations for March, Thomson/First Call lists eight strong buys for Citrix, 12 buys, 11 holds, two underperforms and zero sells.
But analysts at JPMorgan are not sanguine about Citrix’s future prospects. The firm continued to rank Citrix shares at underweight, giving shares a price target of $53, as opposed to its recent price of about $76, in its report on fourth-quarter and full-year 2011.
While the JPMorgan analysts said they “continue to view Citrix as a well-run company,” they also “question the magnitude of the opportunity represented by the desktop virtualization market, of which Citrix is the clear leader.” They noted that in the fourth quarter, most metrics were “about in line,” but license revenue and cash flow were “below expectations.”
In contrast, Raymond James analysts reiterated an outperform ranking for Citrix in their report on the company’s fourth-quarter and full-year 2011 results, giving the stock a new target price of $80. The company “finished the year on a high note” despite “a mixed 4Q,” the analysts said.
The analysts noted that the company predicted “another year of flat margins as they invest in acquired companies and go-to-market.” But, they added, “While ROI challenges and deployment complexity have slowed adoption, we continue to believe that even modest levels of desktop penetration are likely to drive upside consensus forecasts over the next two to three years.”
Source:http://www.bellinghamherald.com/2012/03/21/2446945/mobile-technology-smart-strategies.html
