Citrix shops itself to Dell: Why a deal would make sense

Citrix has reportedly approached Dell about a merger as it seeks to sell the entire company instead of parts.
Written by Larry Dignan, Contributor

Citrix is reportedly shopping itself to Dell as it aims to sell the entire company instead of its parts.

According to Reuters, Citrix, which has everything from mobile device management to virtualization to collaboration to cloud computing software, has approached Dell about a deal.

In July, Citrix said it would explore strategic alternatives for its GoTo product line. Reuters reported that Citrix wants to sell the entire company if it can. Citrix's move to sell is in part driven by pressure from activist investor Elliot Management.

Citrix is expected to deliver more than $3.2 billion in sales for 2015.

The largest problem for Citrix is that it has limited options if it wants to sell the entire company. Many tech giants that could swallow a company with a market capitalization of more than $11 billion already have rivals to many Citrix parts.

Enter Dell.

Dell has been building out its software business and is looking to transform its business as a private entity. Citrix would accelerate Dell's software business in a big way and give it a strong base of subscription revenue. A Dell-Citrix deal makes sense on a few levels. Here are a few:

  • Citrix brings Dell software as a service revenue via GoTo as well as other services.
  • Mobile device management software such as XenMobile would give Dell an edge in mobility.
  • Citrix's desktop virtualization tools would work well with Dell's Wyse unit.
  • NetScaler, Citrix's networking line, would bolster Dell's fledgling networking business.
  • Dell could also bundle multiple Citrix products with its hardware.

In other words, Dell would be a good fit for Citrix. Hewlett-Packard is another option, but the company is busy with its split.

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