Businessmodel of Citrix

Customer Segments

Citrix has a segmented business model, with three customer segments having slightly different needs: Enterprises, Service Providers, and Consumers. Its organizational customers come in all sizes and industries, including technology, financial services, healthcare, telecom, and education.

Value Proposition

Citrix offers three primary value propositions: convenience, cost reduction, and brand status.

The company’s solutions allow customers to utilize a network of computers connected to a central server that hosts its software. A large amount of workers can access the same information and software simultaneously, even if they are widely distributed geographically, creating convenience.

Widely available access means that organizations do not have to provide all of their employees with the same computers, and that workers can even use cheaper or older machines. This advantage enables companies to reduce purchase costs.

The company has established a strong brand over time. It was one of the first companies to offer a computer networking solution, and thus is well-established. It is also widely used, with customers including 90% of the Fortune 500 and 99 members of the Fortune 100. It sells its products and services in over 60 countries. Moreover, Citrix has been recognized by prominent research firms for its performance. Forrester Research identified it as a leader in the Virtual Desktop Infrastructure space. Also, Gartner named it a leader in its Magic Quadrant for Enterprise Mobility Management, as well as a top provider of Enterprise File Sync and Sharing and Application Delivery Controllers.

Channels

Citrix’s main channels are its website and systems integrators (Sis), through which it acquires most customers. The company also maintains a sales team consisting of corporate sales professionals and field-based sales engineers. It sells its offerings indirectly through original equipment manufacturers (OEMs), value-added distributors (VADs), value-added resellers (VARS), and independent software vendors (ISVs). Citrix promotes its offerings through advertising, direct mail, social marketing, and participation in webinars and in-person events.

Customer Relationships

Citrix’s customer relationship is primarily of a personal assistance nature. The company offers regular phone and e-mail support. It also provides numerous other options (for a fee) for obtaining support directly from customer service personnel:

Extended Support – This program offers maintenance and technical support beyond the initial amount provided for an additional fee.

Citrix Software Maintenance – This program offers unlimited 24x7x365 support worldwide, in addition to regular product updates.

Citrix Appliance Maintenance – This program offers unlimited technical support worldwide, regular software upgrades, and the replacement of non-working appliances.

Technical Relationship Management – This program offers a dedicated support person as a single point of contact; the person helps troubleshoot and solve complex problems.

In addition to support, Citrix offers the following:

Consulting Services – Consultants help customers with project implementation involving virtualization, networking, mobility management, and cloud infrastructure.

Training Services – The company offers training and certification programs for the use of its products and services. Formats include instructor-led classroom and online education and 24/7 self-paced instruction.

Despite the offering of these services, there is also a self-service component. Citrix’s website includes a number of resources for self-help, including articles and reports. There is also a community element as it features Community Support Forums for help from peers.

Key Activities

Citrix’s business model entails developing software and maintaining a platform for its customers. The company uses two independent contractors for its hardware manufacturing activity – IBM and Flextronics. These companies also offer warehousing, testing, and shipping services.

Key Partners

Citrix maintains the following four partner programs:

Service Provider – Enables members to provide the company’s virtualization solutions on a subscription, rental, or services basis.

Solution Advisor – Enables resellers and consultants to receive training so they can provide education and implementation support to their customers for Citrix offerings.

System Integrator – Enables companies to help their enterprise customers design, plan, and deliver business solutions using Citrix offerings.

Independent Software Vendor – Enables software firms to integrate Citrix technology into their solutions for enhanced functionality.

Citrix’s specific partners include Accenture, Cisco, Google, IBM, Microsoft, and SAP.

Key Resources

Citrix’s main resource is its software development team, which engages in extensive R&D to enhance the performance of its portfolio and generate new innovations. Members have significant experience in XML-based software development, multi-user Web-based application development, and cloud and networking technologies, among other areas. The company also relies heavily on sales/marketing staff for the sale and promotion of its products/services, customer support personnel for its wide variety of service programs, and training employees for its wide range of education offerings.

Cost Structure

Citrix has a value-driven structure, aiming to provide a premium proposition through extensive personal service. Its biggest cost driver is sales/marketing expenses, a fixed cost. Other major drivers are in the areas of research & development and administration, both fixed costs.

Revenue Streams

Citrix has four revenue streams:

Products and Licenses – Includes revenue generated from the sale of software and licenses for usage of software.

Software-as-a-Service – Includes revenue generated from fees charged for access to the company’s software provided over a network.

License Updates and Maintenance – Includes revenue generated from fees for upgrades, maintenance, and general support for products. Specific programs include Subscription Advantage, Technical Support Services, Hardware Maintenance, and Software Maintenance.

Professional Services – Includes revenue generated from fees charged (on a transactional or annual basis) for customer support, consulting, and training/certification services.