In a back-to-the-future move, Avocent almost one year ago appointed Steve Daly general manager of its LANDesk Software Division. Daly was no stranger to LANDesk, having worked in Intel's systems management business, which was later spun out to form LANDesk Software. Daly was in fact instrumental in Avocent's 2006 acquisition of LANDesk as part of Avocent's executive team. eWEEK Senior Editor Paula Musich on the eve of Daly's one-year anniversary as general manager spoke with him about how well LANDesk has done as a part of Avocent.
LANDesk not long ago celebrated the 15th anniversary of the integrated desktop management suite-better known as LDMS. How has the market evolved in the past few years and what new challenges does it pose for vendors like LANDesk and its competitors?
I was there at Intel when we launched the desktop management suite. About two years into that in the late '90s, people didn't know where the market was going to go. In the last few years I've seen a lot of consolidation in the industry. There used to be a dozen competitors. Now it's down to a short list of us, Altiris and Microsoft. I've come back to it fresh after having left, but the problems are still the same-how to keep a desktop or laptop up-to-date and securely patched. But the mobile component has become a huge part of that.
When talking to those people trying to manage them, everybody acknowledges there's a problem, but nobody's figured out how to deal with them. IT is still trying to figure out how to manage laptops. [The most recent market] report said 30 percent of [PC] shipments were laptops, and the next few quarters forecasts for half and half. So dealing with mobility and with all the things in the corporate WAN is a huge problem for people to solve. When we kicked off the Desktop Management Task Force and launched the suite back when, we were still trying to figure out what the right management was to embed in the platform to make it easier to manage. Intel with vPro has made a great stride. With DMTF initiatives we are working on standard ways to provide management of that laptop and any distributed device out of the box. That's a challenge we've been facing. I think we're getting better at it, but we still haven't come up with a standard way to do that across the industry.
To read more about Avocent's acquisition of LANDesk, click here.
I think the challenge of securing those end devices has become much more important. LANDesk at one point had virus protection that we sold off to Symantec. Every time we think about getting ahead of the threats, the threat-scape changes. I don't see that we'll get to a steady state where all known vulnerabilities will be accounted for. We really have to address that combined with a management bent.
How has the competitive landscape changed in this space in the last couple of years? What new competitors have entered the fray and which ones have dropped off your radar?
Some of the competitors have been bought-i.e., Novadigm is now part of [Hewlett-Packard] and subsumed into the HP stack. Marimba was bought by BMC, ON Technology was bought by Symantec. They've gone to fight other battles. Clearly the consolidation has changed the profile. We always compete with Microsoft and always have and always will. Where Symantec is focusing their energy has changed. We're at a size that gives us enough bulk that people can't question our viability long-term, but we still have flexibility to react to needs in the market.
The introduction of software virtualization from acquired vendors such as Altiris and Softricity promises to reduce the operational burden of updating desktop applications. What impact do you see software virtualization having on the market?
I think that this is one of those technologies that is pretty cool. It has pretty good wow factor. I can walk in with a thumb drive and run an app without ever installing it on the box. The industry is struggling to find where the value proposition is. I think there are two: One, we have one customer with 16,000 apps in their environment. They had 11 full-time people just validating new software coming in. I see this technology as easing that burden. You run it in its own sandbox, it reduces the overall burden of how that software is distributed. In addition, you can run that software remotely and stream it out to a device. That's the thin-client model. It gives you the flexibility that you can run it streaming from a remote location to the data center, or you could run it locally as a virtualized application, so you can run it in a disconnected environment. Those are two areas where that application will be important.
I see it as another way to package your software. Vendors will use it as a way to package their apps-eventually. A lot of vendors let you wrap up their software in a Microsoft Installer package. The market will move to this. But there are some challenges [because] there are competing ways [to virtualize applications], all a little bit different. Some require you to install an infrastructure to be able to do it. The industry is trying to sort out the best way to do this. There will be some confusion in the market until that's settled. We get a lot of tire-kickers. People are starting to purchase [the technology], but it's taken a while for people to figure out how best to use it in their environment. There will be a standard way to deploy apps in the future. What is VMware doing? They're trying to separate the image from the hardware. All application virtualization tries to do is separate the operating system and application stacks and make the application run across platforms independent of the operating system. I see it will gain momentum and become the way we do software distribution.
What is LANDesk doing around software virtualization?
We have our LANDesk Application Virtualization. It runs in user mode and allows you to, within the LANDesk console, package an application up as a standard .exe. So now I can drop that .exe onto a thumb drive, plug it into any laptop and run it on that laptop without ever installing it. As a user it looks and feels just like the console does. It's just another item on the menu. All that training and the way you've done software packaging in the past is the same, whether it's a real or virtual application. Because you package it and it runs as an .exe, you don't need a separate back-end server to host or stream it. It uses standard protocols to stream the application if you want to do that. And it's fully integrated, so it doesn't look like a separate tool, just another feature added to the LANDesk console.
Page 2: LANDesk's GM Looks Back to the Future
How has LANDesk's acquisition by Avocent changed the way LANDesk approaches the market?
I was with LANDesk when it was part of Intel. I left to do a startup just before the spinout. That startup was bought by Avocent and I went on to run corporate strategy. I was part of the team that decided to target the LANDesk acquisition. I have a unique perspective because of that. It's made LANDesk relevant in the market from a size perspective. Avocent is over a half-a-billion dollar company. We bought some host intrusion prevention technology earlier this year that watches behavior on a laptop, and if it detects aberrant behavior, it blocks it-instead of trying to watch a pattern file. We wouldn't have been able to do that if we weren't a part of Avocent.
We've also been able to increase our head count without disrupting the business we're building managing the desktop. We've also started to leverage Avocent experience in the hardware space to wrap our technology in a hardware delivery mechanism. That was something we talked about doing at LANDesk. Without that expertise and supply chain management expertise that Avocent has, that is something we couldn't have done.
And we're also moving back into the data center. The promise of this acquisition is that we can provide technology from the desktop to the data center, because we have the relationships now in both areas. We're strong in desktop. Avocent is in 96 of the Fortune 100 data centers. Companies are starting to look at ways to reduce the number of maintenance agreements and vendor interactions they have. Being a part of Avocent will help us with the CIO's office as it looks to consolidate vendors. ...
We announced the last two quarters were record quarters for LANDesk and we've been able to improve our profitability. We can go faster and remove friction from the system. LANDesk was optimized as a $100 million software business. We've been able to take advantage of the mature systems Avocent has to grow and keep improving our top line. When we acquired LANDesk we didn't want at first to do any harm. We wanted to keep the company on rails. We have clearly delivered on that promise a year later.
What product synergies have emerged from the Avocent acquisition?
We've been able to integrate our Server Manager product with the software that the Avocent customer base uses to manage their Avocent equipment. Avocent is known for out-of-band management-the ability to get to a device whether it's down or whether the network is down. When you combine that with LANDesk's ability to manage applications, patch them, keep them up to date and inventory them, now you have robust management that you get from the same console without having to train people. Coming up we will be announcing more integration with some of our Process Manager technology. Industry analysts said that 2007 was the year of process. What we found in reality is that IT shops are having a hard time figuring out how to implement process management.
What we see as the next right step is to move to process management. What I want [IT shops] to do is think about the processes so that problems happen less frequently. It is a cultural challenge within IT, but also the tool set needs to enable them to do that. We've tried to build into our tool kit process templates that you'll see in the future that automate some of the standard processes that IT goes through. When it comes to patching a system, most of our customers will run it in a test environment, make sure it doesn't blow anything up, and then they'll ask for approval to run it in a production environment. Those are all manual steps and there are holes in that process. There is no way to check to see if that process was followed. The templates build that in. They won't let you distribute a patch until an e-mail approval comes back from a manager, for example.
We're building connectors into the Avocent product as well. The data center is ahead of the desktop environment as far as process goes. The data center has a book that has all the processes IT goes through. We're incorporating our technology into Avocent software to automate processes people go through with Avocent equipment and troubleshooting. CIOs say they want to do [IT Infrastructure Library], but they have no idea how to do it. IT is struggling with how to implement it now. We feel the approach we're taking will help them.
From Avocent's perspective, is the LANDesk acquisition viewed as a success?
Absolutely. One of the goals was that we kept the existing business on track. The fact that we had a second record quarter, are growing the business, haven't had any layoffs and increased the size of the organization is a testament to the fact that we've been successful. When customers' eyes light up about the Process Manager-that is something Avocent wouldn't have had if we had not acquired LANDesk. And we think the best years are still ahead of us. We're frankly just a year into it. The fact that we've been able to grow the business and keep the people-you don't see that in high-tech acquisitions. There wasn't a lot of technology overlap, so we didn't have to do lot of rationalization.
What kind of growth rates has LANDesk seen since the acquisition closed last year? (Revenues for the last full year in 2005 were $83.7 million).
We've been growing about 16 percent in the last few quarters. We feel good about that.
You've been at the helm for nearly a year now. What kind of changes have you made at LANDesk? Have you changed the strategic direction that your predecessor Joe Wang had set?
One of the things we've really tried to focus on is that we want this to be a long-term business. In three to five years we want it to be a business in its own right. We've rebuilt the management team. My VP of sales came back to LANDesk. He hit the ground running. I feel good about the management team. One thing I've really tried to focus on is how we enable IT to focus and become more process- and service-oriented in the way they do manageability. And do that from desktop to data center. So that focus has changed a bit from when Joe was running it. That's probably the biggest change I've been able to implement.
What kind of impact has the Dell deal had on LANDesk's growth? Is that paying dividends yet?
It is. That business is showing very healthy growth. We can't break that out as a public company. We sell our desktop management suite, but we're also a certified partner on the server front. We can patch BIOS on Dell servers. We have templates for provisioning Dell servers. That has been paying dividends for us. Likewise our relationship with Lenovo has been very strong. Both relationships are growing faster than our overall average growth. From a strategy perspective, one of the things that we've done right over the long term is focus. We had a channel model. We've been able to bring together a VAR/reseller channel with Dell's and Lenovo's [channels] and marry those nicely. We have built a very scalable model. Now we will invest in those spaces to drive growth through those channels.
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