Citrix acquired and merged with Tibco for $16.5B
cloud.com
cloud.com
Vista's "solution"? Vista managed to push a portion of the equity to Evergreen (Elliott Management's PE arm), and are building a Broadcom or CA Technologies style mammoth of legacy software by calcifying their technology in F500 and low-technology end markets. Their next merger to further feed the beast is Citrix.
Today's problem? The merger requires billions in debt to pay Citrix's public shareholders, which is put on the merged company's new balance sheet. The market was great when the deal was signed almost a year ago and when the large banks signed up to syndicate (sell to smaller investors) the entire debt balance. Unfortunately, as the debt syndication process was underway, the market turned and the typical investors in these huge tranches of LBO debt were no longer interested. That means the big banks were left to fill the balance of what they couldn't syndicate (contractual requirement) by taking on that bad paper themselves. It's bad paper because the banks commit to the LBO investors they'll get the investors to sign up at a 4% interest rate when any investor would probably ask for 7.5-9% now. Believe 8-10 banks are stuck holding something like $2-3 billion.
The Resolution. Deal got done and the LBO investors forced the banks to eat the losses. Now this black hole of a company will continue to grow until it gets foisted on a company like Broadcom or IBM that would be happy to churn out billions in cash from it. PE firms win. Merged company wins. Banks lose. Employees will lose as massive waves of layoffs are done to "eliminate redundancies" because they won't need two complete HR, finance, IT, legal, etc. teams. And billions in cash flow will be generated as a result.
On the other hand: who wants to keep up with goings-on at places like TIBCO?
Though when it comes to Broadcom: it's news when their CEO isn't dealing drugs from an underground sex lair.
Unless Vista really thinks they can manipulate the old tech companies the way Figma's investors worked over Adobe, then I don't think the results will be great.
No matter how you want to couch it, PE firms got away with this one. They're content to grow the topline 4-8% per year and cash flows 10-15% (the real metric that matters because the company isn't growing enough to ever be valued on a revenue multiple but will be valued on an EBITDA or FCF multiple). At roughly 15,000 combined headcount today, I'd expect that number to be under 10,000 in 24 months.
These companies are basically dying. So might as well manage the decline and return money to investors.
It's good for the economy as a whole if employees move to other companies; instead of engaging in make-work.
On the good side, I was allowed to view this from the perspective of spreadsheets and board meetings and see the net gains. And also do follow-up analysis that showed the least product people retiring or moving to lower quality work while the most productive went on to do 10x better things.
The dark side isn't pretty. We still had to lay off tens of thousands, affecting hundreds of thousands indirectly localized to a handful of communities and cities. I've decimated neighborhoods before by the literal definition (10%+ move out to find work in other cities). And the data tells us that at least a couple of those people will die as a result of the layoffs at the 10K+ scale. Can't talk macro-productivity when that's happening. Too tone deaf.
To my investment committee? We're in sell mode and using the positive coded language you outline. "We see $350M in day 1 synergies (this means fire thousands of people immediately). $600M by the end of our 180-day plan. And $1b by completion of our value creation plan 365 days post-close. This builds in a 1.8x floor for cash flow growth even if we're delayed in synergy realization and frees up cash for our go-to-market investments. Given the current GTM org returns $1 of ARR for every $1 spent, and our current market analysis of total whitespace, we plan on investing 30% of every dollar saved into our sales and marketing initiatives and additional 5% in a product refresh focused around key sales rep pain points like UI/UX and ease of use."
Even when we're selling to our IC, it's still very factual because these people are professional BS-detectors.
Elliot is obsessed with Citrix, and this is furthering their conviction with leverage to boost their opportunity.
How does this part work?
conversely, any start-up that can bridge the moat is guaranteed a thrilling ride.
also, very important, if a company that is already a big powerful vendor buys this, then they can use their already existing leverage to ramp up prices. after all all now they can try to - and eventually will - upsell all kinds of shit, they will milk every "synergy" opportunity they can think of, will offer package deals (that look very good on paper, but of course increases the lockedin factor, and hides the real problem of keeping the company on the legacy shit).
> [...] massive waves of layoffs [...]
Given that you seem to like neither the ingredients nor the result of the merger, shouldn't you be happy, if they release workers so that they can join more societally productive ventures?
Massive waves of layoffs are bad for most people and usually great for the company but I won't put a value judgment on it. Some think it "leaves them free to pursue more productive things" and others think "that person is going to struggle for a while due to corporate greed for cash flow." Candidly, I've done several of these deals before where we merge two companies of similar complexity and lay off 50-70% of the combined headcount. The company almost always turns out better for it. Things are that inefficient past a certain FTE size.
For those laid off, it's a different story. An internal analysis done by consultants my team hired 3 years after a multi-stage layoff of 10K people found that >50% of those affected were materially worse off and only 10% were better off. Statistical analysis on the strongest prediction of negative outcomes was age. Nothing else was even close to as relevant.
Michael Dell acquired EMC that way, and with some financial engineering, came out ahead with a few ten billions.
https://www.forbes.com/sites/antoinegara/2021/08/03/deal-of-...
Let's say you want to buy an asset that can generate revenue. Let's also assume you need to borrow the amount, that you don't have it lying around.
You could take out a loan, and back it with some other asset, like your car.
Or you can get the company to take out a loan.
If the Company makes money, that money goes to servicing the debt. Either way its "your money" servicing the debt.
There are reasons to select one approach over the other, but putting the loan in the company name is often better for tax, and personal asset protection, reasons.
So yes, you buy the company with its future profits, but ultimately that's why you buy it in the first place.
Having just left one, the core reason for the failure was a tech plan forced upon two companies that was so unrealistic it was always going to fail. A bit of me thinks it's the problem was the investor for setting up a terrible plan. But realistically, I think it's more the management of the two companies inability to explain to a growth board that you can't rewrite a 7-year application in 3-months.
Original Plan: Migrate extra features and data over to new platform 3-months. If it's just a migration it's a bad timeline but overal not a bad plan. Problem was, it was a rewrite. The new platform didn't have the core features.
3-months pass: The growth board invests more money increases time and focuses everyone to this. While everyone keeps calling it a migration.
Another 3-months pass: The growth board invests even more money, increases the dev team, hires consultants who have help with such programs in the past.
Another 6-months pass: Still not delivered. Patence is getting thin. This was meant to be a 3-month project and it's been a year and we're not there. Extra time given with being features removed from scope. Delivery date announced to partners.
Another 3-months pass: Delivery date coming up, announcements made they will migrate on the deadline.
1-week before delivery: Team find out core functionality still doesn't exist. Announce another 3-4 month delay. Patience getting very thin.
Next deadline: They release a half finished product because management is going to get fired if they don't.
Result: Investor realises everything has gone wrong. After about €50-100 million investment Tries to sell company for €400 million. Drops price to €200 million. Sells for €75 million while clearing debt. Announces €50 million gain.
While the pressure from the owning company did cause issues, the original issue comes from the fact someone let them think it would originally be a 3-month project. This is not to mention that developers were telling the company management these deadlines couldn't be met, including 6-weeks before the first announced delivery date yet they continued to try and go forward until they realised at the last minute they couldn't meet the deadline. Every time it was at the last minute they would announce the deadline couldn't be met. Every 3-4 months the teams were working toward deliverying on a deadline.
It's just fascinating.
Never heard of those.
Citrix Cloud is also hilariously bad
Ever want to use crystal reports to generate scannable paper correspondence for tens of thousands of businesses in a single job? The state of Wisconsin sure did!
Anyhow, I was so happy Sharepoint was dropped for OneDrive, a slightly less bad product (and same with Teams/Skype)
Still not as bad as QuickTime.
If it's brown, liquid and caffeinated then I'm happy. Especially if I'm drinking it first thing in the morning.
Not that I don't enjoy good coffee. But my bar is pretty low.
If you have a datacenter, it has a good shot of running some VMware.
If you run logistics at almost any medium sized or bigger company, you’re using SAP or Oracle.
If you have a group of employees that sell things, Salesforce is common.
This is the software that literally runs the world. If you’re not familiar with it, then you’re ignorant about how the world works. Nothing wrong with that of course, but I don’t understand the pride in it. Especially on HN, where Hackers tend to be curious.
Either it's completely automatic (like most PAYE employees in the UK), or the tax system is simplified to point where it's a simple form to complete.
Oh well, on with my day.
I'm not British, so it also took me a while to realize that Tibco wasn't Tesco.
https://www.tibco.com/blog/2019/11/06/tesco-bank-and-postnl-...
RDP was a pared back version of Citrix, and the license terms left Citrix free to sell a with a more fully-featured virtualised desktop product running on top of Windows Server.
Years ago I worked in defense contracting. The US Department of Defense uses Citrix (which is easily Google-able; don't come at me about "OpSec") and my experience with it was always abysmal compared to RDP. I have a funny feeling that even with Microsoft in the mix it'd be cheaper and better for everybody involved to just pay M$ for the RDP CALs and ditch the dinosaur that is Citrix altogether.
That being said I hear VMware Horizon blows away Citrix too
I will never touch Citrix again.
One of the reasons companies licensed Citrix is because Citrix kept investing in ICA and it was about 2-3 times as bandwidth efficient. In the era of 64 Kbps ISDN WAN links this was critical.
Microsoft did something around 2008 and now RDP seems better overall. It can handle 4K at 30 fps without difficulty.
Meanwhile Citrix did weird random things to ICA that made it markedly worse.
It says a lot that all of the Citrix engineers I’ve worked with (including myself) prefer to RDP into a Citrix server instead of using its native ICA protocol!
Other deliberate breakage was Citrix deprecating SSL support directly on the session hosts. They did this to force customers to buy their overpriced Netscaler / ADC appliances. These slow down connections and can’t handle many 4K streams.
Generally they seem to have become an acquisition-driven company instead of an engineering-led one.
https://news.ycombinator.com/item?id=27692965
it is actually worse, they probably use a frankenstein mix of Notes, Exchange, Office365, and something else
Citrix tried to pivot into other spaces like virtualization (Xen) but that market was flooded with alternatives, and most companies who used Xen were happy with the free version.
Insanely unbaringly slow with tons of constant lag and IT issues.
I know, anecdote...
If we get projects with customers that will rather hand us low quality Dells with 4 / 8 GB with HDD, to access their infrastructure, I will always advocate for a Citrix or RDP based setup instead, due to how bad those laptops tend to be.
the citrix garbage I have to use to log into work is like Windows 95, it regularly corrupts its own install (on a machine only used for that)
and of course the uninstaller doesn't clean up everything, so you have to download a separate program to clean that up
and the less said about tibco rendezvous the better
Jaspersoft is both insanely powerful and will make you want to kill the authors and then yourself.
There isn’t really anything else that does what it does though and you can take that statement both ways.
I really hate Jaspersoft but unless you work in a certain kind of enterprise environment you can go an entire career without running into it.
Hope you didn't want documentation on the class interface though. I'm sure you can figure it out from context...
For example, when Okta bought Auth0 last year, that was titanic for my employer (we're in their space). But it barely made a ripple to anyone outside of the auth space. People still confuse Auth0 with OAuth when I give talks!
I think about it in other ways too. Look around you. Wherever you are, unless you are in the wilderness, there are 1000s of companies that worked to bring the built environment to you. Whether that be a picture frame, an envelope, a laundry basket, whatever.
It's humbling.
It also points to the Okta investor presentations and call transcripts, which are fascinating. The latest one has this tidbit: "It's like there's a customer identity cloud, and that's Auth0, and there's a workforce identity cloud, which is both for employees and for your extended workforce, partners and suppliers and things that are kind of workforce like, and those are the platforms in the product suites we go to market with."
https://investor.okta.com/static-files/b52f68c6-0979-4c49-9e...
The other way I learned at a meetup that was hosted by the ING (a large international bank). An architect was trying to recruit me to come work at ING and explained their fancy architecture to me. Right at the heart of it was a TIBCO message passing layer. It made me cringe.
I don't know why they couldn't have just picked rabbitmq or something, probably similar reasons to why some companies pick oracle over postgres. I don't think it's worth it, but I'm not an enterprise architect.
I'm going to guess you're under 30?
Amongst the many things Tibco sold was Rendezvous, which was extremely popular in the banks for running trading systems back in... the 90s and early 00s. Then of course, multi-core chips came along and sending messages to other processes on single cores over the network, versus, other processes in the same bit of silicon via memory instead.
And Citrix - another extremely popular bit of software for connecting remotely to Windows boxes (amongst other things). Again in the 90s and early 00s.
There seems to be so many of these zombie companies now. Embarcadero is another one that always springs to mind. Produces nothing new, just shambles around on existing revenue streams.
Citrix should be more well known, but if you've never worked in a Windows environment then perhaps not.
Citrix also has a major load balancer/“ADC” business - formerly Netscaler. Had to look it up recently for a k8s ingress controller.
At a previous, also HUGE employer, we used Tibco Rendezvous for FX trade messaging and it was a great product, in that it was performant and never seemed to fail.
https://docs.tibco.com/pub/ftl/4.3.0/doc/html/GUID-C2A32299-...
I've deployed their various products since 1999, back in the NT4 Terminal Server edition. I have fond memories of running MS Word on UNIX terminals at university by connecting to Citrix running on NT4 on my home PC. Other students would walk past rows of screens in the computer lab all showing drab black and white fixed-width text editors except for one in the middle with a colourful WYSIWYG Windows application overlaid on top of the standard UNIX applications.
I would always respond to the queries about how this was working with: "Magic."
Now? Three large customers are winding their Citrix deployments down. Feels like working with Novell products in the early 2000s.
Especially in cases like this where they had their better "colourful WYSIWYG Windows application" while the rest of us are stuck on our "drab black and white fixed-width text editors"
backstory: Citrix has been releasing a community version of their xenserver product (based on the open source Xen project) but over the last few years they have been removing features from the open core version, going so far as to remove Xen from the name in late 2019
You never know what corporations will do with products they're supporting, whether they're open-source or not. (Ask VMWare customers how they're feeling now, for instance.) But with open-source, if there's a large enough user base, someone can step in and take over the software to fill the gap -- and in fact, that's exactly what's happened with XenServer: the XCP-ng forked the open-source part of XenServer, and now Vates (the company behind XCP-ng) is actively collaborating with Citrix on future development. Removing features from "free XenServer" wouldn't really have that big of an impact on customers, since they'd almost certainly end up in XCP-ng anyway.
Took a trip down to memory lane and found this recent post which is very recognizable: "How Citrix dropped the ball on Xen ... according to Citrix" https://www.theregister.com/2022/09/30/citrix_xen/
https://prospect.org/power/griftrix-citrix-systems-debt-deal...
Someone in this thread indicated that Citrix was the original developer of Microsoft Remote Desktop, and later licensed it to Microsoft. All Citrix's website seems to offer is "One digital workspace platform to empower secure hybrid work".
And what's the deal with Tibco?
For Tibco I have no equivalent story to tell.
Edit: https://en.m.wikipedia.org/wiki/TIBCO_Software gives an idea.
Tibco is like Apache ActiveMQ or RabbitMQ or IBM WebSphere MQ.
This was the most toxic env I've put myself through. Zero regrets on leaving apart from not going earlier. Some good people there. Some technically apt as well. But the amount of arses and backstabing minions is staggering. I've never before or after felt so bullied by my own coworkers. What they lacked in skills the made up in politics and gaslighting. And it was much like that in all levels. Busy working, busy empty talking, bullshiting and politics oh so much politics that it would make a notmal person throw up.
Anyway i gtfo with clear PTSD and I should probably seek councelling as I'm afraid it shows at my current job.
PS: i've been through a few companies in rough waters. It's always the same story. Nobody loves the company. And if you dare do something about it you are treated as enemy. All the entrenched actors treat it like a cow to be milked till it dies. And when it finally dies they act so surprised and sad...untill they get the severance package.
I will say, I think the product's technical underpinning is not ideal. Instead of just using SQL, they have a proprietary language built in which has similarities to SQL but is much less easy to read and use. For instance a lot is stored in Metadata tables that are many clicks away from the report they're referencing. Also, there are a few cryptic keywords and things specific to WebFocus, which is obviously not that widely used and doesn't have many S.O. posts about it. So you're left staring at some various mysterious keywords or specific-syntax and thinking, do I learn anything more about this than what I need to, since this product is probably not going to last and will end up in the dust-bin like many other proprietary products. And it's just not a very employable skill like SQL.
Overall, I don't like WebFocus, I think Tableau must be a couple notches better. But hey, my org is under-staffed and we don't have the manpower to change systems, so we're stuck with this.
Not that anyone would miss Citrix except for their open source contributions, even if they are pared down.
When i worked it it i quite liked it
What role is Vista playing here? It's not clear why that company is necessary or even involved.
It sounds like Vista is the owner of both entities and plans to sell the combined unit at some point.
It's called Synergy.
An early Ajax framework that sunk without a trace? Version 3.8 introduced Chrome 2.0 support, with a headline feature being support for Dojo framework components. The last version 3.9.2 added support for IE11. Memory lane for anyone evaluating primitive Ajax frameworks. https://docs.tibco.com/pub/general_interface_enterprise_edit...
Vista Equity Partners and Evergreen Coast Capital Announce the Completion of the Transaction to Acquire Citrix Systems and Combine it with TIBCO Software.
CEO just needs to aggressively outsource all software development (their leadership page https://www.cloud.com/leadership.html gives some hints) to cut costs and boost bottom-line for two years, so that numbers look nicer in IPO prospect one-two years from now.