Citrix To Acquire Wrike Strengthening The Modern Digital Workspace

Citrix To Acquire Wrike: Strengthening The Modern Digital Workspace

In Cloud, Digital Transformation by Daniel NewmanLeave a Comment

Citrix To Acquire Wrike Strengthening The Modern Digital Workspace

The News: Citrix Systems, Inc. (NASDAQ:CTXS),  announced that it has entered into a definitive agreement to acquire Wrike, a rapidly growing, recognized leader in the SaaS collaborative work management space, for $2.25 billion in cash. Citrix today also reported earnings for the fourth quarter and fiscal year ended December 31, 2020 and has posted additional materials, including an earnings letter and investor presentation, on its Investor Relations website at http://www.citrix.com/investors.

Analyst Take: While not necessarily a household name for the average consumer, in the enterprise space, Wrike has built quite a footprint providing a suite of collaboration tools, most notably single-source of truth tools for projects and workflows, which has jettisoned the business to more than 20,000 clients including many blue chips such as Google, Okta, Airbnb, Siemens, Snowflake, and Dell.

With Citrix acutely focused on modernizing the digital workspace, the move adds a set of material features that stretch its current Citrix Workspace product to offer a vehicle to bring teams, data, and applications together more efficiently and to potentially make Citrix a more central part of the daily software interaction that employees have. This is why we see Wrike frequently notated as a Slack competitor in some of today’s news analysis. While the ability to thread conversations, collaborate in real-time, and migrate off of email for projects are features that can be done in Slack, I actually see this being a better mouse trap for capturing unified workflows, whereas I find Slack to be better utilized for asynchronous chat/collab. And yes, both can work in multiple use cases, but the reason Asana, Basecamp, and others have been popular despite the rise of asynchronous chat apps are that projects/workflow management and real-time chat do have different requirements. It will be interesting to watch how this shakes out.

The way I see it, the natural progression of this acquisition is pretty straight forward. Citrix, prior to the acquisition, had an end-to-end offering for the modern workforce, but with Wrike, it is adding several key capabilities to scale the digital workspace offering.

While I mention the collaboration and workflow above at length, other areas that Wrike brings to the table is a substantial investment in automation, AI to accelerate workflows more seamlessly–Essentially tying together the backend workspace tools that Citrix has built this part of the business around, with an application layer that will make it more prevalent in user workflow moving forward.

A Deal on Earnings Day 

Citrix picked an important date to make the Wrike announcement, as today was also the company’s 2020 Q4 Earnings Day. It beat on both top and bottom line with adjusted EPS coming in at $1.46 versus analyst estimates of $1.34. On the revenue side, the company delivered $809.7 million versus estimates of $781.6 million. An overall solid performance for the company heading into the new fiscal where the company provided guidance in the $3.33-$3.36 Billion top line with $6.20-$6.40 EPS during the same period. 

The continued investment into scaling key business areas through organic growth and inorganic investments lie today’s announcement of the Wrike acquisition will be key in enabling the company to outperform in 2021. 

Overall Impression of Citrix Deal to Acquire Wrike 

Citrix has long been focused on transforming the digital workspace, and we all saw the material change that Covid-19 brought to remote work. This is an accelerant for businesses in this space–this includes Citrix. I believe that flexible work models are here to stay. The Citrix and Wrike tie-up provides a conduit for growth for Citrix while delivering on a common business challenge, which is dealing with the complexity of today’s hybrid and distributed work environments to empower employees and organizations to maximize performance. 

I believe this deal has the potential to deliver a cloud-based digital workspace experience that is both secure and flexible. Of course, all acquisitions require steadfast integration and strong leadership. I expect the Citrix team to work closely with Wrike leadership to shorten the transition window to extract value and deliver next-generation digital tools to the enterprise. This, coupled with strong financial growth for the combined business, will be the marker of a successful and well-timed acquisition. The next 4 quarters will be telling. 

Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.

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The original version of this article was first published on Futurum Research.