Citrix made its name with a specialized software product, Citrix MetaFrame, now called Presentation Server. It was used by a blue chip list of Fortune 500 companies to run Windows applications on servers, accessed by PCs via Citrix's communications protocol ICA. For several years, Citrix has been positioning its product line around a theme that company executives recite like a refrain: application access management.
Michael Cristinziano, Citrix vice president of strategic development was recruited to join Citrix just over three years ago by CEO Mark Templeton to oversee Citrix's merger and acquisition strategy. The job keeps him very busy; the company has invested more than US$600 million in acquisition during his tenure. The recent top purchases have been:
- Orbital Data, $50 million, announced August 2006
- Reflectant, $16.7 million, May 2006
- NetScaler, $300 million, June 2005
- Teros, $27.4 million, November 2005
- Net6, $50 million, November 2004
Cristinziano spent most of the 1990s as an investment banker and Wall Street analyst, focusing on telecommunications and networking companies. In the 1980s, he was in engineering, with Bellcore, now Telcordia.
Wall Street seems in general to approve of Citrix's spending plan. In 2002, the company's stock cratered, almost hitting bottom at about $5 per share. Since then, the price has made a long, steady climb, hitting a 5-year high of $45.50 per share in May of this year. It's now dropped down to just over $30, in the wake of the two most recent buyouts.
Cristinziano spoke with Network World Senior Editor John Cox about his role, how the acquisitions fit into the company's so-called "access management vision," and Citrix's acquisitions and integration strategy.
You'd covered Citrix as a financial analyst. Why did you accept job offer from Citrix?
The attractive thing in coming to Citrix was changing it from a single-product company to a diversified product company. This is a big change. When I joined, nearly all the revenue came from MetaFrame, now [called] Citrix Presentation Server.
In 2002-03, about 95 percent of our revenue came from Presentation Server. In the second quarter of 2006, about 75 percent of revenue is Presentation Server, which grew about 10-12 percent year over year. So the "new stuff" is now 25 percent of revenue. The new stuff really started in 2004, with Citrix Online, our software-as-service, based on our "GoTo" product line [with the acquisition of ExpertCity].
But this new stuff is growing significantly faster. Online services were about 13 percent of Q2  revenues, and they grew 47 percent year over year. The remaining products are about 12 percent of quarterly revenues, including Net6 [Citrix Access Gateway], NetScaler, Teros [Citrix Application Firewall], and Edgesight. They grew 25 percent from Q1 to Q2 in 2006. NetScaler grew from $20 million in 2004, to $40 million in 2005, and the pace continued into this year.
Wall Street expects Citrix will finally reach $1 billion in revenue this year. Will it?
Mark Templeton, our CEO, put that goal out there: he put it on the cover of the 2002 annual report to shareholders. [Before I joined Citrix,] I told him that took guts, because 2002 was a down year for Citrix. I asked him "why are you so bullish?" That's when he spelled out his "access management" vision. And he convinced me to join the company.
Actually, after the June 2006 second quarter, if you add up the previous four quarters, we've already built $1 billion. But by Dec. 31 of this fiscal year, $1.1 billion is the forecast by Wall Street. Now the talk internally is 'how do we get to $2 billion and how fast can we get there?'
So what's the "access management" vision?
What we're trying to do in this decade is analogous to what Cisco did in the 90s. They consolidated the end-to-end network at Layer 3 and below. A decade later, we're consolidating end-to-end application delivery at Layers 4-7. Now, we have three categories of products, all of which we term "access infrastructure." They represent three infrastructure markets: application delivery, security and networking. We're at the intersection of these, and focus on the upper layers of the software stack.
So your flagship Presentation Server is the "delivery" software: hosting applications on central servers, accessed by clients via your ICA protocol. What have you been adding with these diversification buys?
One area has been diversifying into what we call Citrix Online, for example with the GoTo product line, such as the GoToMyPC service, GoToWebinar, and other online services, in a separate division. Their revenues will be well over $100 million this year, which is over 40 percent growth [compared to last year].
Application networking [and security] is the second area. There was the Net6 SSL VPN [now Citrix Access Gateway], and then NetScaler, a Web application delivery platform with lots of application acceleration, and Teros, the Web application firewall. The latest one is Orbital Data [now Citrix WANScaler], a WAN optimization appliance.
But haven't you just bought a bunch of different product lines, that you're now selling so you're not stuck with one source of revenue?
Our software is a platform. These products could be sold separately. But their real power comes from working them together. In May 2006, we did the Reflectant software acquisition. Their EdgeSight software is able to monitor the end-user [application] experience. It lets you answer the question "how good is the actual performance of the application?" That answer is really needed for an end-to-end, integrated application delivery system. Then, we'll be able to put additional operational functions on top of this. You can expect more to come around the idea of building new management pieces that go beyond what EdgeSight delivers today.
Citrix has been talking about integrating these products since you started acquiring them. What evidence is there that you're actually creating an integrated product set?
Our SSL VPN has been integrated with Presentation Server. The first thing we did after we closed the Reflectant acquisition was to push the completion of EdgeSight for Citrix Presentation Server, a custom-built performance monitor [which Reflectant had been developing]. Then, we started work on EdgeSight for NetScaler.
With the Teros Web application firewall, the first thing we did was to start to integrate it with the NetScaler appliance. Finally, with the Orbital Data software [Citrix WANScaler], we'll be creating a common management system that will let you configure, monitor and feed to upstream management systems data about everything related to "access." It will be an element management system, integrated across our entire application delivery product line.
Any other integration efforts?
A key strategic effort is around the access client on the desktop. With Presentation Server, we had the [traditional] ICA client. Today, there are over 20 million concurrent users of that, on desktops, PDAs and other devices.
With the Presentation Server 4.0 release, in mid-2005, we started shipping a broader access client, bundling the ICA client with the SSL VPN client, and our single sign-on Password Manager client.
Our next step is to add other client components. For example, we can add EdgeSight for Endpoints, a performance monitoring agent running on devices. Another might be an Orbital [WANScaler] client component.
The overall goal is to create a self-installing, easy to maintain client that won't break other applications. It will be analogous to Symantec's Internet security client suite. We'll have a Citrix icon in the desktop systems tray.