Citrix seeks to advance its SaaS goals by taking over Wrike in a deal valued at $2.25 billion, marking its largest acquisition yet.Â
Virtual desktop infrastructure (VDI) provider Citrix is angling for a slice of the burgeoning cloud collaboration market with the $2.25 billion WrikeOpens a new window acquisition. With the buy, Citrix is pitting itself against collaboration heavyweights Microsoft Teams and Cisco.
The deal will allow the Florida-headquartered tech firm to extend its digital workspace toolsOpens a new window , including content collaboration applications, unified endpoint management, secure access, virtualization, and analytics tools.
Rise of Digital Workplace
As the clamor for digital transformation (DX) got louder, businesses of all sizes moved to the cloud to achieve the much-needed agility and flexibility in 2020. Last year, we witnessed the cloudification of digital workplaces with apps and tools that allow remote workers to work seamlessly across any device or location. Digital workplaces are what’s holding up businesses for now. Gartner predictsOpens a new window the market for social software and collaboration is expected to hit $4.8 billion by 2023, nearly doubling in size.
So, it’s no surprise to see how the collaboration market, which consists of meeting and communications applications, has become the new â€˜sweet spot’ for tech titans rushing to embed themselves in the ecosystem. And as the space gets more crowded, it’s interesting to watch deep-pocketed tech giants get closer and closer to SaaS providers who solve specific digital workplace challenges with point solutions. Earlier last year, Salesforce bought Slack for $27.7 billion, it’s priciest deal ever to keep up with Microsoft in an â€˜all-digital, work-from-anywhere world’.
Big Gains From Cloud to Fuel Citrix’s Growth
Citrix announced the acquisition along with its Q4 2020 financial resultsOpens a new window that beat Wall Street expectations. Wrike, which sold a majority of its ownership to Vista Equity Partners in 2018 for $800 million, also posted strong growth with a 30% CAGR in SaaS ARR over the previous two years. Until the deal with Vista Equity, the company had raised $26 million in three rounds of funding.
The way we work has forever changed, and we recognize that how we operate and collaborate will too. To help usher in a new era of personal and corporate productivity, I’m excited to share that today we announced @CitrixOpens a new window ‘s intent to acquire @wrikeOpens a new window . pic.twitter.com/qeThJOcMmWOpens a new window
â€” David J Henshall (@DavidJHenshall) January 19, 2021Opens a new window
Speaking to CNBC, David HenshallOpens a new window , President and CEO at Citrix, noted, â€œWe spent the last several years radically transforming Citrix, to become a platform of cloud delivered services for really helping people work more efficiently, you know, helping them consume their work resources. And as we made our way through that transition, the vast majority of the way through, you look at the results we’ve been able to post up, are SaaS and subscription revenue on an ARR basis has been rapidly accelerating this entire year.â€
â€œA nice exit in the ever-crowded project management space. Citrix acquires Wrike for $2.25B,â€ tweetedOpens a new window Jamin BallOpens a new window , Partner at Altimeter Capital. However, the focus here is not on project management but on Wrike’s cloud-based SaaS model that Citrix plans to integrate into its workspace offering.
While the specifics of Wrike’s work management integration with the Citrix Workspace remain under wraps, the company revealed the integration would streamline collaboration and provide employees with additional tools to work efficiently and securely irrespective of the physical location. At the same time, it will enable Citrix’s SaaS business to transition into a complete cloud-based delivery model, a hallmark of digitally-enabled remote work.
â€œBringing together a cloud-native delivered platform, to be able to solve all of these needs for customers on a very holistic basis, is, it’s just a perfect outcome. It allows us to advance our strategy of really transforming even further into being a cloud-delivered SaaS-based platform. And, the timing just works. The timing works because of the lessons we learnt through the pandemic,â€ Henshall added.
By bundling all of the capabilities together, Citrix aims to deliver an end-to-end digital workplace environment that is â€œmost engaging, most productive, and most secureâ€. The combined Citrix-Wrike platform will serve 400,000 customers across 140 countries.Â