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 Channel Futures

Cloud


Citrix Online Buys Paglo: MSP Software, SaaS Acquisition

  • Written by Joe Panettieri 1
  • February 24, 2010

Citrix Systems is the latest company to move into the crowded managed services software market. Specifically, Citrix Online has acquired Paglo Labs Inc. — a provider of SaaS-based IT management software. Here are the details, and the potential implications for the MSP software landscape — where mergers, acquisitions and investments continue to accelerate.

Citrix is rebranding Paglo as GoToManage, which will “provide small and mid-size businesses (SMBs) and managed service providers (MSPs) an affordable alternative to costly and complex premise-based software,” according to the company. Watch for Citrix Online to connect the dots between GoToAssist (an existing brand) and the new GoToManage (the rebanded Paglo offering).

Simply put, the managed services software industry has reached an inflection point. SaaS-oriented MSP software acquisitions are accelerating. Similar to today’s Citrix GoToManage move, Quest Software acquired PacketTrap in December 2009, and GFI Software Purchased HoundDog Technology Ltd. in July 2009. I realize features and functions vary greatly from vendor to vendor. But PacketTrap and HoundDog essentially are SaaS-centric tools for MSPs.

Meanwhile, upstarts like Severa (a SaaS PSA provider in Europe) and Naverisk (a SaaS RMM specialist in Australia and New Zealand) are taking steps to go global. And in somewhat related news, ConnectWise Capital has invested in LabTech Software.

As a whole, the various acquisitions, investments and global expansion efforts mentioned above will potentially place competitive pressure on the MSP software market.

Big Software Steps In

Still, MSPmentor has been waiting for big, publicly held software vendors to more aggressively target the MSP industry. Citrix certainly fits that description, having generated $1.61 billion in annual revenues for 2009, according to AP.

Now, Citrix is set to launch of GoToManage. Based on the acquired Paglo platform, GoToManage will continue to target MSPs and SMBs, confirms Elizabeth Cholawsky, VP of products and client services at Citrix Online.

The Paglo platform has attracted “thousands” of customers since the company launched in 2007, according to Paglo CEO Brian de Haaff.

In the following two FastChat videos, from TheVARguy.com, de Haaff and Cholawski provide more thoughts on why Citrix Online acquired Paglo, and where GoToManage fits in the managed services market.

Citrix Online’s GoToManage Strategy

Paglo’s History and MSP Focus

Next Moves and Software Competition

Starting today, the Paglo service has been rebranded as GoToManage, but customers shouldn’t notice any changes in terms of the way they access and leverage the tool, de Haaff added.

I think Citrix Online’s buyout of Paglo is small but strategic. Citrix is retaining the Paglo team, but financial terms were not disclosed, and de Haaff declines to disclose exact employee and customer counts.

Still, the following is clear: Citrix plans to attack and undercut traditional, on-premise RMM tool provider prices. Yes, most of the major RMM software providers have already diversified beyond on-premise options to introduce SaaS configurations. And I realize many MSPs are fiercely loyal to their existing software providers, since deployments often involve careful customization and integration steps.

Even so, Citrix is a big, publicly held software company with deep financial resources. In its Q4 2009, Citrix’s revenues were $451.2 million, net income topped $88.1 million, and online services revenue grew 18 percent to $82 million, according to AP.

And Citrix also has a massive channel partner program; those VARs are natural targets for the GoToManage platform.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Cloud RMM/PSA Strategy Videos

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6 comments

  1. Avatar Randy Spangler February 24, 2010 @ 1:50 pm
    Reply

    If all of these buys are targeting the MSP market, it sounds to me like a race to the bottom. If all of the RMM offerings are similar (and they are, aren’t they?) then the only way to compete is with lower pricing.

    So what else is their strategy? Use the MSPs as a ‘shakeout cruise’ to mature their software and then blow it out to the general public? What market would that be? SOHO and home users? How successful has Dell and the Geeks been pushing Managed Services from their corporate castle? How many medium sized businesses with in-house IT have no RMM tools? I don’t know the answer, but I can’t imagine that larger companies are still limping along with VNC on the desktop. But, maybe that is the target.

    If so, is that a real threat to traditional SMB MSPs? Selling IT managers (or their management) on outsourcing control of their resources to a MSP seems a lot more risky of a proposition than acquiring a tool from someone like Citrix that does the same thing, but without the IT ‘backfield’ as a threat from a traditional MSP.

    Kaseya has been selling directly into the Enterprise and Medium Business space for a long time. Maybe this is an encroachment into that space more than an attempt to steal MSP clients.

  2. Avatar Vlad Mazek February 24, 2010 @ 2:15 pm
    Reply

    It’s pretty interesting, as all of these companies fight over the last bit of acquisition space left (we’ve had a number of talks over the past 2 months with interested parties) it becomes apparent that:

    1) You must have an all inclusive solution covering everything.
    2) You must find someone that will actually use it and turn money.
    3) When #2 fails, you do it in house.

    There is a great deal of ambiguity around #2 and #3 as these major acquisitions are either going to turn software companies into service companies that outright eliminate their partner channel (Microsoft, IBM) or they become software companies with the ability to manage a large channel..

    One things for sure, the Mamp;A folks need to find a better way to reconcile the above. If your offer consists of anything but cash, and that amount is dependent on a third party executing on a completely foreign line of business… I dunno, as someone that hasn’t signed on the line which is dotted, I like the competitive matrix that’s left out there. Kind of like 5 years ago when all the AV’s bought up every single security, firewall, av, antispyware, antimalware, popup blocker etc tool that effectively got marginalized into the ground by Microsoft with Vista, 7 and Security Essentials.

    -Vlad

  3. Avatar Joe Panettieri February 24, 2010 @ 2:43 pm
    Reply

    Rob, Vlad: Thanks for weighing in. One think MSPmentor will try to do is keep these acquisitions in perspective. I realize it’s dangerous for us to lump all RMM and PSA tools together. Like the car industry, many of the tools target different segments, verticals, regions, etc…

    Do you want an upscale offering with all the bells and whistles and lots of horse power? Do you want a custom-made option? Something else?

    I think the same questions apply across the MSP market. And even as we cover consolidation and MAs, we’ll try to remind readers regularly that not all tools serve the same segments.

    Tricky times. But intriguing.
    -jp

  4. Avatar Peter Sandiford February 24, 2010 @ 5:04 pm
    Reply

    From my perspective in the trenches for the last decade, RMM is a cornerstone of the foundation of a restucturing of the IT industry and we are just at the very beginning in terms of both innovation and adoption. It is much more like an exploding universe of options than the imploding black hole suggested in comments like “race to the bottom”

    The IT services business will be very different in a few years. Our goal is to ensure our partners seize the high ground in this transition.

    The future we anticipate and what we are doing about it is described in our “Seven Megatrends” blog series.

    http://www.levelplatforms.com/blog/.

    Peter

  5. Avatar Bob Penland February 24, 2010 @ 5:36 pm
    Reply

    I don’t see this acquisition as significantly different from their 2004 acquisition of Expertcity that gave them GoToAssist. Remote support was big at the time and they wanted to get in on the action. Now that GoToAssist lags behind other competitors in the marketplace feature wise they needed something to enhance that offering.

    I also don’t see Citrix making a services play like Dell or Best Buy. They don’t have a strong services portfolio and prefer to rely on the channel partners to provide service.

    It’s exciting to see all of the activity and opportunity in the MSP space. Kind of makes me want to open up a new managed service practice 🙂

    Bob Penland
    CTO
    TruMethods, LLC.

  6. Avatar Joe Panettieri February 24, 2010 @ 8:11 pm
    Reply

    Bob: I agree; I don’t see Citrix making a big “direct” push with Paglo/GoToManage. I think this is a big channel push.
    -jp

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