Citrix Online Buys Paglo: MSP Software, SaaS Acquisition

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.