Digital Transformation- Consolidation of Workforce Management Solution Market

Workforce Management Software- Integration Happening in the Fragmented Market

Feb 2021- Citrix entered into a definitive agreement to acquire Wrike in all cash deal from Vista Equity Partners for US$ 2.25 billion. The American investment firm Vista Equity Partners had acquired Wrike in 2018.

Citrix, expects to fund the deal with a combination of new debt and existing cash & investments. It has also obtained a commitment from JPMorgan Chase Bank for US$1.45 billion in a senior unsecured bridge loan.

This is one of the most opportune acquisition considering the new normal post the pandemic. There are two key aspects driving the acquisition:

1)      The importance of technology for managing distributed workforce cannot be overstated with many companies looking at allowing employees to work from outside the offices for a long time

2)      The Workforce Management Applications segment of the industry is very fragmented and a consolidation is overdue

It makes even more sense when Slack with much bigger user base but with similar offerings has been acquired for US$27.7 billion by Salesforce. With large-scale remote working and the shift to digital, organizations are facing the pressure to keep employees productive and engaged. This has led to quantum leaps in digital transformation initiatives with intense focus on workforce collaboration and management.

According to Gartner (26 August 2020) - Demand is high for workforce management applications that support new ways of working in response to COVID-19. However, the market remains fragmented by industry, use-case and country-specific requirements.

In this context the acquisition of Wrike brings in a lot of complementary capabilities for Citrix.

	Citrix	Wrike
Motto/Mission	Empower people to do their very best work	Help you do the best work of your life
Key Focus Areas	IT, Security, Networking, HR	Marketing, Professional Services, PMO, Engineering, Finance, Sales & Operations
Key Offerings	Unified digital workspace technology that already includes application and desktop virtualization tools, content collaboration software and other products.	Dashboards and shared calendars, collaboration tools, project templates, project visibility, file management functionality, request and approval capabilities, and additional functionality.
Revenue- Year Ended 2020	US$ 3.24 Billion	US$ 140 Million

 

According to quarterly report for the three months ending December 2020, the synergies that Citrix envisages are:

·        Strengthen Wrike’s reach by selling Wrike's Collaborative work management (CWM) service platform through large network and channel partners

·        Leverage Citrix’s large existing enterprise customer base, which has been foundational to its go-to-market strategy, to further expand Wrike and Citrix Workspace

·        Cross-sell within organizations as Citrix solutions are typically sold into IT and security and Wrike’s focus has been on lines of business – most notably marketing, project management and professional services

·        Expand seat penetration in vertical end markets with greatest opportunity for growth. Citrix enjoys broad, diversified end-market exposure, with seat penetration highest in industries like financial services and health care. Wrike’s end market exposure is complementary, providing an opportunity to expand deeper into Ctrix’s less heavily penetrated end markets while leveraging its strongest relationships to expand Wrike’s Collaborative work management (CWM) platform.