UPDATED 12:01 EDT / JULY 11 2017

CLOUD

Once again, Citrix replaces CEO amid shift to cloud services

A year and a half after its last reshuffle, the leadership team at Citrix Systems Inc. is already undergoing another major change.

The biggest news is the departure of Kirill Tatarinov, who came aboard as the desktop virtualization giant’s chief executive officer last January following 13 years at Microsoft Corp. Citrix divulged on Monday that the reins have now been handed over to longtime insider David Henshall. He brings an impressive set of credentials to the post that include a stint as interim CEO during the company’s 2014 leadership transition.

More recently, Henshall held the dual position of chief operating officer and chief financial officer. The two roles have been separated in the wake of his promotion, with fellow Citrix insider Mark Coyle set to take over as interim CFO while an executive search agency is currently scouting candidates for the COO post at the behest of the company.

The leadership shakeup heralds broader organizational changes that are slated to be announced at its second-quarter earnings call. Citrix said it plans to reveal a “series of strategic initiatives intended to drive operating margin expansion, increase capital return” and free up more resources for product development. It’s part of the company’s ongoing effort to refocus from selling on-premises software to more lucrative cloud services.

Such far-reaching corporate initiatives often tend to involve layoffs, especially when there’s a specific focus on increasing margins. Henshall is a natural choice to lead the transition given that he has already been playing a key role in Citrix’s shift towards the cloud as COO and CFO.

But while the executive’s experience should certainly help, the initiative won’t be without challenges. Citrix is facing intense competition in the desktop virtualization market as well as mounting investor pressure, which reportedly drove it to start exploring a potential sale earlier this year. This would indicate that Henshall has been appointed as CEO not merely to improve the company’s competitive position but also to make its balance sheet more attractive to prospective buyers.

The transition will be orchestrated by a newly formed Operations and Capital Committee consisting of Henshall, executive chairman Robert Calderoni and two directors. One of them is Jesse Cohn of Elliott Management Corp., the activist hedge fund responsible for many of the investor-driven changes that Citrix has made in recent years.

Image: Citrix

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