Citrix Channel Chief Fitzsimons: ‘Hundreds Of Partners’ Now On CSP 2.0 Model

'We did a higher percentage of the business through the channel in Q2 than we have during my tenure at any time,' Citrix channel chief Ethan Fitzsimons tells CRN in an interview.

Almost two years after Citrix was taken private and merged with enterprise software vendor Tibco, the virtualization and desktop delivery company is “more and more engaged and reliant on our channel” than ever, channel chief Ethan Fitzsimons told CRN in an interview.

Hundreds of partners have migrated to what he calls version 2.0 of the Citrix Service Provider (CSP) program, which moves partners to an annual commitment model from a monthly one – perhaps bringing to mind Microsoft’s efforts around its new commerce experience (NCE) platform.

And the vendor’s most recently wrapped quarter “was the most channel-centric quarter we've had in my five years with Citrix,” he said.

“We did a higher percentage of the business through the channel in Q2 than we have during my tenure at any time,” said Fitzsimons, who put the total Citrix partner count in the thousands. “The openness to work with partners, willingness to work with partners, is in as good of a position as it's been in years. Many years.”

[RELATED: Citrix Inks Deal With Arrow To Provide More Resources To Smaller Partners]

Citrix Channel Partner Program

Fitzsimons – whose official title with Fort Lauderdale, Fla.-based Citrix is vice president and head of global channels – said that CSP 2.0 has “been really successful through the year and really been something that has been well-received in particular by our larger partners.”

Smaller partners should benefit from a new partnership with Arrow Electronics where the distributor is tasked with sales, marketing and technical support for Citrix partners consuming less than 2,000 licenses across North America and Europe, Fitzsimons said.

Last year, the vendor moved its commercial business to 100 percent channel. This year, the vendor moved to a 100 percent rebate program with no pre-built discounts in an effort to minimize “conflict that can occur when you're negotiating with a customer based on price points and so forth.”

Mike Strohl, CEO of Concord, Calif.-based Citrix partner e360—No. 128 on CRN’s 2024 Solution Provider 500—told CRN in an interview that the Citrix Enterprise Browser in particular has seen strong demand from customers lately.

While the 2022 take-private deal for Citrix by investment firms that combined the virtualization and desktop delivery vendor with enterprise software vendor Tibco and formed parent company Cloud Software Group created short-term uncertainty for Citrix customers, the quality of Citrix’s products is keeping the vendor competitive, Strohl said. Citrix’s platform strategy is resonating in the market.

“Yes, they have new requirements around licensing and how customers both procure as well as consume what they have overall, but it seems like the noise is settling a little bit,” Strohl said. “There are things happening that are actually impacting things in a positive way at the end of the day for Citrix.”

In a September 2023 report, Gartner forecasted desktop-as-a-service (DaaS) spending to reach $4.6 billion in 2027 compared to $3.1 billion in 2023.

As the market for virtualization, virtual desktop infrastructure (VDI) and DaaS sees increased competition amid pricing changes at VMware and focus on market domination by large tech giants such as Microsoft and smaller players such as Parallels, Fitzsimons told CRN that business in general for Citrix “is very healthy.”

“When it comes to VDI and DaaS, we are the market leader,” he said. “We continue to be the market leader.”

Here’s what else Fitzsimons had to say about

What do you want Citrix partners to know about this new Arrow Electronics relationship?

When we look at the CSP (Citrix service providers) business, which for us, it's really there's two, two types of partners that sit within that CSP business, it's MSPs and then also ISVs.

And not all ISVs, but those that want to host the solution and really manage it on their own, rather than in a resale mechanism. … We had, really, two goals for the year.

One, try and build a more predictable model for everyone. And so historically for us, the CSP motion has been a month-to-month, consumption-based MRR (monthly recurring revenue) business.

And we wanted to really transition that for everyone to be more predictable and be more an annual commitment on both parties and so on and so forth.

And then the second piece was really to continue to invest in the product and give our CSP partners more capability and capacity that they can then take out and monetize as value with their customers.

And so the way we really approached No. 1, that consistency and predictability piece, was introducing what we call CSP 2.0, which is an annualized product packaging and an annualized commitment from both partners.

And we've been able to move hundreds of partners over that model. And it's been really successful through the year and really been something that has been well-received in particular by our larger partners.

But as we engage more and more into some of our smaller CSP partners around the world, the transition for them from a monthly consumption-based model to an annual model was more difficult for them to manage. … The more feedback that we got from those partners around the switch from going monthly to even quarterly billing or for being consumption-based to a static number, we realized that there was an impact there that didn't exist to the same extent within the large partners.

We started to explore options for managing that business and putting it in a position where it was still a predictable business for those involved. But for the partners themselves, they still had a route to be able to service their customers in a business model that aligned to how they operate their businesses today.

And so that's where we've reached this joint agreement that we're announcing with Arrow, where Arrow will now manage the partner ecosystem for us. Any partner that has 2,000 users or less in this CSP model will work exclusively with Arrow in North America and Europe.

And the goal with that is really to make sure those partners still have the level of coverage, service, technical support, so on and so forth that they need to be effective in their business and maintain flexibility in the model in which they want to consume, which Arrow will help bridge that gap and facilitate that for those partners to still give them a path to grow.

Smaller partners can still make good revenue with Citrix and CSG?

Absolutely. And I think in some ways, there will be doors there that will be able to open up to help them make more money.

So not just be profitable in the pool that they have today, but grow that footprint into new customers and new opportunities … that may be a small SMB (small and midsize business) customer. Maybe more into the midmarket.

And then those partners still have the flexibility of maintaining a resale relationship with us as well. So depending on how the customer wants to consume, they still have both options.

They still have the ability to do a more traditional resale. Or they can still facilitate this more flexible CSP model for our SMB and midmarket customers.

Are you hoping the Arrow deal grows the Citrix ecosystem?

There's an opportunity to grow the ecosystem. Arrow has a great footprint into the MSP community. They leverage tools like their ArrowSphere platform and so forth. It gives them reach and provides a lot of value to that community.

This agreement does open the door for Arrow to reach more of those partners that will, in turn, drive more organic growth from a customer ecosystem standpoint.

And I also think it gives them an opportunity to marry partners within the ecosystem that may complement each other. And out of that will be new opportunity for growth.

Are Citrix and CSG looking at growing other distributor relationships?

We have a large network of distis all around the world and a large relationship with most of the … logos and brands we're all familiar with.

As far as the rest of our business, there's no impact in terms of those relationships. So we'll continue to work with all of our trusted distribution partners in both the resale motion as well as the CSP motion.

We still have a very strong ecosystem of partners that we will maintain the traditional CSP relationship with. And those folks will still buy through their distributor of choice.

And so it's really only in this 2,000-user and below environment where we've taken that cut-off line and entered into the strategic agreement with Arrow. Everything else remains, basically, business as usual.

Why invest in distributor relationships?

Arrow, as an example, has done a good job of evolving who they are as a distributor. I came from distribution once upon a time in my career. And it's always been near and dear to me, even from afar and looking at the business model.

They recognized an opportunity as well to invest where they really are better positioned to manage a lot of these partnerships.If you look at some of these smaller MSPs, they may be a little bit smaller to an individual vendor. But across multiple vendors, they have a more significant footprint. And in many cases, Arrow is supporting them across multiple vendors or other distis as well.

In this scenario, with Arrow, where they have more centrifugal force with a given partner because of the breadth of vendor relationships and are better positioned to really support them than any of the individual vendors would be on their own … especially with some of the automation and so forth around ArrowSphere.

That gives a strategic advantage in terms of, how do you manage the operational components of this in a very streamlined fashion. … We've had a longstanding, very productive relationship with Arrow, both in North America and in Europe for many years.

There's a lot of incremental value they provide across the scope. So whether it be some of the automation and ease of use from order delivery and quote-to-cash process. … It's also technical support, presale support, managing multiple technologies coming under the breadth of one managed service they're going to deliver in a white label type offering where it looks like that partner, but you've got three or four different technological components under the hood.

They're very well-suited to help manage that both from a branding but also from a delivery standpoint. And a lot of things that, frankly, we don't have the flexibility to be able to have that same reach to some of those partners that they do.

And it affords benefit for both of us. Great benefit for the partners, and benefit for us as well. And then it allows us to take a lot of our resources and investment – really focus on how we are directly managing the larger CSPs, making the right product investments for them to be successful with their customers and giving them the right level of support.

And especially on the technical support side and making sure we're driving adoption to invest even further into those partners.

How’s business for Citrix?

In general, the business is very healthy. One of the things that stands out to me from a channel-centric standpoint is we're becoming more and more engaged and reliant on our channel.

Our Q2, which was the most recent quarter that we've wrapped fully, was the most channel-centric quarter we've had in my five years with Citrix. We did a higher percentage of the business through the channel in Q2 than we have during my tenure at any time.

The openness to work with partners, willingness to work with partners, is in as good of a position as it's been in years. Many years. And we've done a few things specifically to try and to try and drive that facilitation. Last year, we moved our commercial business to be 100 percent channel business, which still is the case today.

And then this year, in March, we launched our new channel program, which is a 100 percent rebate channel program. There's no pre-built discount into the program. And one of the benefits of that … all of the financials are predetermined and managed in the form of a rebate outside of the scope of the sale, it's very clear for everybody going in how that that will work, who makes what and when, and minimizes any of that traditional conflict that can occur when you're negotiating with a customer based on price points and so forth.

From an engagement standpoint, we're in as good a spot as we've done in many years. Now that's all irrelevant if the technology is irrelevant. You're also seeing the benefits now of some of the reinvestment we've made over the past few years in development really into our core products.

When it comes to VDI (virtual desktop infrastructure) and DaaS (desktop-as-a-service) we are the market leader. We continue to be the market leader. We have an advantage technologically from a competitive standpoint among other folks in the industry. We continue to maintain that, and in some segments, continue to grow them.

The other thing that is really picking up steam and has been successful with our partners is our transitioning from a packaging standpoint. So we used to really force folks to buy our products in a piecemeal fashion. So you would buy on-prem VDI, cloud DaaS, NetScaler – iit was all separate SKUs (stock-keeping units) and you had to have a PhD in Citrix to understand what SKU to use.

And we've transitioned everything now to our Universal packaging or Citrix Platform License. So it's really two options. … The key is, especially for partners in Universal, is it's opening up more capability at basically the same price point that they can monetize.

So they can monetize either the capabilities of the license themselves. Let's say they have a legacy VDI customer. Now we've incorporated NetScaler into that Universal SKU that they're selling to that customer. It gives them the opportunity to look at competitive takeout opportunities basically at the same price point.

And not only is there value in that from a license standpoint, there's a lot of services dollars to go along with that in making that migration or even diagnosing what that migration might look like. And so opportunities afforded by the packaging that we're also then supporting with incentives and so forth for our partners around services.

The ability to earn reimbursement based on adoption is something fairly unique. And it's just opened up multiple different avenues for our partners to earn cash flow and profit around the Citrix portfolio and not just a straightforward resale business based off of one of these point products.

Are you seeing healthy new logo activity?

I put new logos in two buckets – new logos in terms of customers, but also new logos in terms of partners. One of the things that I think we're incredibly fortunate to have,as we've gone through a transformation of the company is, when we look at our channel, we have an incredibly skilled and mature channel.

We have fantastic channel partners. They have – decades doesn't even do it justice – but decades of experience and a deep breadth of understanding, not only of the product, but of our customers together and how to manage them. We are very fortunate to have that luxury of the ecosystem that we have. So when we look at strategic new logos from a partnership standpoint, it's very specific.

We are not broadly in the resale business, as an example, looking for new logos. Now this agreement with Arrow opens up the door to expand that a bit when it comes to the CSP world. But in the resale world, it's really more about reinvesting in our existing partners and our top partners versus trying to find the next partner that we're going to go invest in. Because the skills that we have in the ecosystem today are sufficient to reach the markets that we're after.

Similar thought process a little bit in the customer ecosystem as well. When you look at our customer base, we have great penetration … very large global customer base. But especially when you look into large enterprise organizations, we have a pretty immense footprint there already.

And so what we're really focused on is looking at those existing customers that there's already a high-value relationship and making sure that they're really realizing all the value that they can from Citrix, that we're investing in the products that are best suited to support them in their enterprise endeavors.

And it really goes back to that same thought – we have great customers. We have great partners already. How do we work with them? How do we make them more successful? And how do we show them more value? … The focus is really on continuing to invest in the core customer partner stuff that have made us successful for the last 30 years.

What should solution providers know about Citirx customer trends?

If you look across the ecosystem, we have some very strong security-focused partners. That's one thing that maybe we did not articulate as well as we could have over the years is really what a security impact some of our core competencies provide.

But also some of some of the incremental values that we've invested in either through acquisition or organic development over the years. And so there's definitely a high level of strategic engagement with our top customers around the security impact of what we do. That's always been there, but we haven't called it out so directly.

And also the move to the universal licensing and platform license is really opening up those doors and those conversations in a much more natural manner than they would have happened in the past. … There's a lot of functionality that we provide in terms of making sure you were preventing downtime or unexpected instances. … It's much easier not only to prevent the impact of those but also to recover once there is an impact utilizing Citrix and managing those endpoints and how you approach that. … And then our relationship with Microsoft is something that continues to bear fruit and is very positive, not only how we go to market together or joint accounts.

Nearly all of our partners are also Microsoft partners. … We signed very publicly a long-term strategic relationship with Microsoft. As Microsoft moves not only their sellers and moves towards Windows 365, in that move there's great benefit in terms of incorporating Citrix into the conversation.

But also even in how customers want to buy products today. When you look at what the marketplaces are doing around the three primary hyperscalers, there's a lot of benefit from a program standpoint.

And how we engage with partners, given that it's all rebate, all of those investments are protected on the back end in the form of rebate, which has been a challenge for a lot of vendors in managing the transactions where the customer does raise their hand and want to procure through a marketplace.

So it's really making sure the technology is relevant, having some of those conversations … around security or what are we doing with Windows 365. But that's also, how do we actually get to the fruit at the end of the end of the process? … Partners are in this to earn a return on their investment for their stakeholders and shareholders. And if they can't do that, then they'll find other avenues to invest their time and capital into.

Has the CrowdStrike-Windows Incident helped sell more customers on your backup offerings?

It's definitely spurred a lot of conversations. … It's made folks more keenly aware of some of the value, perhaps, that we are already providing that maybe, in some cases, isn't so top of mind as it should be.

Because we have been the incumbent provider in a lot of our accounts for many years. … There were some pretty high profile customers that I can't necessarily share publicly, but they were very minimized in their impact.

It could have very easily had a significant impact. … And then some conversations around, ‘Hey, we wish this would have been prevented. And if we would have been working with Citrix in a different manner, maybe it would have been.’

How’s the competitive landscape for Citrix?

We're in a great position when it comes to the competitive landscape at the moment. Some of that is just based on the strength of the technology. But some of it is also based on how we're approaching the market.

Earlier this year, we came out with two very specific incentives tied to kind of the approach to Universal packaging of our technology focused on displacing – at that time, VMware EUC (End-User Computing), now Omnissa – as well as F5 when it comes to the capabilities that we now incorporate under Universal with NetScaler.

That's an area with partners where the dialog has increased exponentially. The volume of those engagements, the number of customers evaluating, what we can provide to help simplify things for them from an operational standpoint. There's obviously a lot of financial benefit in that as well if they can avoid multiple vendors in the renewable costs and so forth, go with that and be able to standardize under a single platform license.

Those two in particular, where we look at a competitive landscape, where we have an advantage, and partners are recognizing that, customers are recognizing it. We're very pleased on that front.

Is it unexpected to see Citrix partner with a competitor like Microsoft?

It is one of those relationships, like many across the industry, where there are times where things are competitive. And more often than not, they are not. And it's really a cooperative effort. Our products help enable Windows delivery in myriad ways around the world to millions of customers.

They recognize that. We are one of their largest partners in the world and vice versa. And overall, we continue to have a positive relationship with them over the years. But right now, I think that's as much of a positive engagement and productive teaming as certainly I've seen in my time here at Citrix. … There was this idea perhaps at one point in time where we transitioned from the on-prem world to the cloud world.

And if you go back, let's say, a decade, maybe there was a mindset to go, ‘All right, all this IT spend that's going into data center today, someday it's going to move to someone else's data center. It's all going to the cloud. And that's absolutely not what we see. And what seems to be the case in reality is there's a lot of different ways to get to the same outcome or to a desirable outcome.

And it depends on the priorities, financially, technologically, and the demands of a given business. We tend to summarize our product – we call it Universal – the technical name is Universal Hybrid Multi-Cloud. And that's for a reason. … It doesn't matter which cloud you want to run on – if it's your cloud, if it's Microsoft, if it's AWS, if it's Google, if it's a mix of all the above, or someone else, enter cloud name here. You have the flexibility of where your license sits, how you use it and how you manage it.

Because that's really the world in which we find ourselves today, as customer by customer, that map looks very different. We just want to make sure that from a solution provider standpoint, you can deliver an outcome based on your customers’ needs and not based on how a product's been packaged.

The channel remains an important go-to-market motion for Citrix?

We are a channel organization through and through. When I came – at that point, when we were Citrix – for me personally, that was one of the criteria. If I'm going to move somewhere, it needs to be a company that … has a channel DNA. That's always been the case for Citrix.

In the last few years, with some of the changes that we've gone through as a company, from the outside in, I think folks were questioning and looking at. … A lot of the feedback that we get from our partners recently in particular is that they can feel that they made it through that period of assessment on their end, where they understand that we are not only still a channel company, but … more so than ever.

And so we are completely invested in driving growth – and driving growth with our top partners, specifically through our customers. And that's reciprocal. We are incredibly lucky to have the ecosystem of partners and the depth of knowledge and understanding and expertise that we have in that ecosystem. And we appreciate that, and we don't take it for granted.

We want to make sure we keep doing the things we need to do so those folks can be successful not only driving outcomes for the customer, but driving outcomes for their own bottom line. … Earlier this year, we made the decision as a company to get out of the billable services arena.

We still have services that we deliver. There's contracts that we have a contractual requirement to deliver on. And we still have things that we're going to do to make sure that customers are successful. When we do that, we're not charging for those billable services. So what we've really done is we've really turned the customer success and the ultimate ability for a customer to be successful or not with our products – that's in the hands of our partners.

And so that opens up the door for revenue-generating opportunities, of course, for those partners. And we've seen a lot of partners benefit from that. We're seeing the fruits of that really come to fruition now a couple quarters in.

But also, I think that's a really good (way) to display the level of trust that we have with the ecosystem as we're putting the success of our customers in the hands of our partners to be able to deliver that support. And so far, that's been a wise decision.