Citrix, then known as Citrus, was founded in 1989 by Ed Iacobucci, a former IBMer who was the chief architect of the OS/2 computer operating system that was jointly created by IBM and Microsoft. Iacobucci saw a big opportunity to develop a multiuser version of OS/2 for remote access as businesses migrated from individual computers to networks of connected computers. The Citrix multiuser OS he developed was low cost, easy to install and administer and offered centralized control. In September 1989, we invested in Citrix, with John Doerr taking a board seat.
Early on, Citrix faced a big problem. Right before the launch of the Citrix multiuser OS, Microsoft announced a switch from OS/2 to Windows, which made the Citrix product virtually unusable. While shuttering the business was an option, we were not ready to give up. Kevin Compton, a Kleiner Perkins partner who was a Citrix board director for 13 years, arranged a meeting with Microsoft to explore what could be done to salvage the product. Microsoft made an investment in Citrix, which agreed to develop a new multiuser product that would work with Windows.
Multi-Win 2.0 was released in 1992, enabling remote access for five users (a number that increased with later releases), laying the foundation for the eventual virtualization of Windows. Demand was strong, and Citrix had few competitors. By 1995, with the introduction of WinFrame, a multiuser operating system for Windows NT, annual revenues reached $10 million—and later that year the company went public. Today Citrix is a $13-billion market-cap company providing server, application and desktop virtualization, networking, software as a service, and cloud computing technologies.
Citrix demonstrates our commitment to sticking with entrepreneurs even when the going gets tough. We negotiated the life-saving agreement with Microsoft, secured additional investment from Intel, played a key role in retaining Mark Templeton as President in 1998, and added Tyrone Pike as a director. At the company’s 25-year reunion, management credited Kleiner Perkins for staying the course through hard times and adding real value to the company. The firm’s patience was handsomely rewarded, as Citrix became one of our highest-returning investments ever.