David Henshall is out as Citrix CEO amid disappointing sales this year and mounting pressure from activist investor Elliott Management. Following a shake-up of Citrix’s board, the company disclosed Wednesday that chairman Bob Calderoni will step in as interim president and CEO.

Citrix’s Bob Calderoni

Citrix also said that it is reducing the size of its board to eight members. Giving up their board seats are Henshall and Ajei Gopal, who joined in 2017. According to Citrix, Gopal is stepping down to avoid any conflicts with his role as CEO of Ansys.

Henshall, an 18-year Citrix veteran, has been under fire after missing sales targets for several consecutive quarters. The company said it expects to report that revenues during the third quarter for the period ending Sept. 30 were in the mid- to high range of guidance. Citrix will provide a complete report on Nov. 4, with revenues falling between $765 million and $775 million.

Citrix saw a sharp increase in sales during the first few quarters of the pandemic last year. As companies suddenly shifted to remote work, many had a rapid need to extend their virtual desktop and app capacity. But after the initial surge in demand, revenue growth plateaued — and investors have become impatient.

Henshall had also faced criticism about last year’s $2.25 billion acquisition of Wrike, an upstart that provides SaaS-based project management solutions. Critics are not convinced that Wrike will provide a meaningful path for growth for Citrix and its partners. The project management and work productivity market is crowded, and now more so with Microsoft’s release of Teams Viva.

Citrix also continues see employee turnover. Before appointing Mark Palomba as channel chief last month, his predecessor, Bronwyn Hastings, was at Citrix for less than two years before departing to Google Cloud. Marc Monday, appointed last year as managing director of Citrix global ecosystem GTM, also departed after 15 months. Monday is now VP of strategic partnerships at Sage.

What’s Next for Citrix?

Calderoni, who joined the Citrix board in 2014, is stepping in for the second time as interim president and CEO. The first time was when Citrix tapped him to replace longtime CEO Mark Templeton. Calderoni is best known as chairman and CEO of Ariba, which he led until SAP acquired it in 2012.

The shake-up comes in wake of recent reports that Citrix is weighing whether it should put itself up for sale. While Citrix isn’t commenting on the reports, they come after Elliott Management’s stake in Citrix surpassed 10% of shares. Elliott Management is known for pushing companies it takes stakes in to sell themselves or make strategic changes.

While Calderoni becomes interim Citrix CEO for the second time, the company hasn’t revealed plans to find a permanent leader. Whether he becomes the permanent CEO, Calderoni is likely to accelerate Citrix’s transition to the cloud, which to date has taken longer than other companies, according to a report by Morgan Stanley analysts Thursday.

“Having witnessed numerous cloud transitions over the years, we find that the reverse scenario is what typically unfolds — revenue growth temporarily decelerates while investments pick up to help migrate the customer base to the cloud,” according to the report. “Having taken this nontraditional approach to its cloud transition, we believe Citrix has lengthened the timeline to successfully make the strategically important transition to the cloud by underinvesting in product, sales and customer success. Supporting our expectation of a potential change in approach going forward is that interim CEO Bob Calderoni has a more established track record as an operational leader as the long time CEO of Ariba.”

Calderoni signaled in a statement that he is committed to accelerating that shift.

“We remain focused on transitioning the business to SaaS as we work to securely deliver a unified work experience for our valued customers,” Calderoni stated. “I am confident that this will be a smooth leadership transition.”