Citrix plans to profit from rather than be streamrolled by seismic tech changes
Window seats on planes are normally reserved for wide-eyed, first-time-flying children and, as it turns out, the CEO of Citrix on occassion.
When he has made a mistake or is particularly troubled by something, “I sit by the window,” Mark Templeton told the audience at WorldCity Global Connections event on Wednesday. “I don’t normally sit by windows but it helps me think.”
“We learn more when we fail,” he said. “As long as we keep our minds open and learn from what we did wrong… ‘I’m not going to do that again.’ “
Since becoming president of the Fort Lauderdale technology company in 1998, there have been far more successes than failures, and revenues have climbed from slightly less than $250 million to more than $1.6 billion. It is one of the nation’s largest technology companies, accomplishing what only about 50 companies in the industry have ever done: reach $1 billion in annual revenues.
(Click here for a 20-year history of the company and the technology industry. A pre-event profile of Templeton can be found here.)
In fact, shortly after the dot-com bust, the company suffered its first decline in annual revenues, dropping from $592 million in 2001 to $527 million in 2002. Its first acquisition had gone poorly. There were some miscommunications with the Board of Directors.
It was a time for some soul-searching. Templeton, who had moved to South Florida from Silicon Valley in 1995 when he was hired to oversee the company’s marketing efforts, sought an outside consultant to advise the company. What he wanted to know: “Can we be independent or do we need to sell ourselves?”
From that review came a commitment to become a Billion Dollar company within six years, something only about a dozen companies in the industry had done to that point.
*Today, the company is well known* to the IT departments of all major companies — 99 percent of all Fortune 500 companies are customers — and gaining wider familiarity through GoToMyPc, GoToWebinar and GoToMeeting. Citrix specializes in allowing people to have access to their computers and computer data regardless of where they are. It has offices in Asia and Europe as well as Silicon Valley and about 57 percent of its revenues are from outside the United States.
The company has been in the news lately as larger technology companies, some of them cash-rich, sniff around for acquisitions in a challenging market. “We’re on the short list of every bigger guy in the food chain,” said Templeton, adding that he knows most of the CEOs personally in his industry and is accustomed to takeover rumors. “That’s how it works.”
But in response to a takeover question, a proud father spoke of his 24-year-old daughter, who, in addition to being a “beautiful young woman,” is “independent. That’s what’s important to me.”
Public companies such as Citrix are limited in what they can say about acqusitions and mergers.
*Templeton did predict* that change, big change, is coming — to technology companies, to the way of life to which most Americans have grown accustomed, and to how technology will be used in the future.
With regard to the technology comapnies, he predicted some big-name, high-profile tech companies “will be gone from the market in five years,” but admitted he couldn’t predict which ones. He stepped back in time to the early days of the computer when there was IBM and the Seven Dwarfs — Burroughs, Sperry Rand, Control Data, Honeywell, General Electric, RCA and NCR –to show how profoundly things can change.
IBM, in fact, left the PC business, which was founded in Boca Raton — and that led to the founding of Citrix 20 years ago by a small group of former IBM employees who had come to appreciate the South Florida lifestyle.
With regard to the way of life to which Americans have grown accustomed, he said, “I’m 100 percent certain our country is going to have to recalibrate itself to a lot of change and a lot of change we are not prepared for. We’ve been living in a bubble for about 10 years. We have been living in la-la land.”
The country needs to stop playing defense, what he acknowledged was an understandable response to the Sept. 11, 2001 terrorist attacks, and start playing offense again, like when Kennedy challenged the country to put a man on the moon before the end of the 1960s.
“You cannot grow and thrive without aspiration… You can’t get up every day and talk about defending yourself… You can’t always talk about what you are going to do to keep the company from failing.
“We are very inward looking. Today, the world’s a small place. What happens next door does matter.”
*Templeton also sees big changes* coming to the industry in which he works, and one of the terms he used was “customerization,” meaning the customer will drive change in technology as much as the companies themselves.
Again, he harkened to the early days of the computer, to provide an example. The personal computer was never imagined by the pioneers in the industry, who did not foresee a home use. Customers drove the innovation.
“Customers have been talking for five years,” he said, “about paying ‘software taxes.’ ‘I have to pay whether I like it or not. I’m stuck with it.’
He called it the difference between artificial stickiness and natural stickiness.
Citrix products like GoToMeeting and GoToWebiner are examples of “software as a service,” the model he sees overtaking acquired software. He also hopes they are examples of products with natural stickiness. Citrix is today the fourth largest player in the field behind salesforce.com, WebEx and Intuit, he said.
That desire by the consumer to pay for software only when needed and used will be a driving factor in dooming some larger software companies.
“We haven’t seen this kind of change in at least 25 years,” he said, going back to the dawn of the personal computer. “We will not be a victim,” he said of Citrix. “We will be an enabler. We are going to become a leader in customer-based licensing.”