Citrix: Acquisition Target for SAP, Oracle

I have recently written several pieces on the Enterprise 3.0 and the Extended Enterprise trend. In this article, I am going to cover a company that aligns well with the trends of collaboration and the Extended Enterprise, a space that has really heated up of late, following Cisco’s acquisition of Webex.

Today, businesses are no longer limited to one location or office. Employees need to access data while on the move or even while working from home. More and more work is being outsourced and there is a need to share and access data and applications throughout the extended e(n/x)terprise.

Citrix (Nasdaq: CTXS) provides this flexibility of working from anywhere while ensuring the security of the data. It provides solutions that can control how users connect and how they access and use applications from various locations. Citrix seems to have cracked the Extended Enterprise phenomenon by extending the enterprise beyond its physical walls.

Citrix provides on-demand applications for remote desktop access, Web conferencing, and online collaboration. Its products include Citrix® GoToMyPC® for secure remote PC access, Citrix® GoToAssist™ for live remote support, Citrix® GoToMeeting® for online meetings, and Citrix® GoToWebinar™ for Web events. Citrix® GoToWebinar™ won the 2006 Frost & Sullivan award for “Best New Web Conferencing Service” along with awards from LAPTOP Magazine Editors’ Choice, TMC Labs Innovation. It also won the 2007 SC Magazine Reader Trust Award for IPSec/SSL VPN Solution.

Though there are numerous competitors for individual Citrix products, as an integrated provider of on-demand access to networks, data, and applications, the company’s position is strong. Citrix has been aggressive in acquiring complimentary technology to maintain its leadership position. Major acquisitions include Expertcity (2003), Net6 (2004), Netscalar (2005), Reflectent (2006) and Orbital Data (2006). In the first quarter of 2007, Citrix acquired Ardence Inc. to improve its application delivery infrastructure for Windows-based applications.

For fiscal year 2006, Citrix reported annual revenues of $1.134 billion, compared to $909 million in 2005, a 25% increase. For fiscal year 2007, the company expects net revenues to be around $1.31 billion. For the first quarter of 2007, Citrix reported revenues of $308 million, compared to $260 million in the first quarter of 2006, an 18% revenue growth.

Its stock has done well, especially in 2007. Its current market cap is $6.19 billion with its stock trading around $34.

Furthermore, SAP and Oracle are 2 large companies in the Enterprise Software space who need a serious collaboration strategy that includes Web Conferencing, Desktop Sharing, and such, and Citrix can be an excellent acquisition for either of them.