As enterprises get serious about moving real applications to clouds, whether public or private or hybrid, cloud software companies are finding they need to differentiate themselves, to "niche" as the techies say.
Citrix (NASDAQ:CTXS) has decided its niche is mobile.
The company's acquisition of Zenprise is designed to help it build a secure mobile suite that will include its Citrix Receiver virtualization technology, GoToMeeting, Podio and ShareFile. The idea will be that mobile devices will be able to do all the things desktops can do, with full security and control.
Zenprise specializes in Mobile Device Management or MDM, which is the security piece of the puzzle.
Citrix' main competitor in this area was expected to be VMware (NYSE:VMW), which has a "Horizon Suite" of tools that lacks an MDM component. But VMware is consumed right now with other problems, namely building a cloud suite under former CEO Paul Maritz, and may not be paying attention to this area as it should.
All of which gives Citrix a good head start in the market. The heavily-advertised GoToMeeting can thus be seen as just the entry portal into a much larger offering, one that could prove highly profitable going forward. The consumer product can then lead directly into an enterprise offering, sold for the "bring your own device" or BOD market.
BOD is going to be a big buzzword in 2013, and Citrix is already on it.
CTXS stock, meanwhile, has been on a wild ride this year that has gotten it right back to where it started. But annual revenue growth is in the 20% range, its operating margins are at about 20%, there's no debt, and operating cash flow is solid.
Now that the company knows what it's about in the cloud space, it's poised for take-off.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.