CRN Interview: Greg Butterfield, Altiris

In the wake of an unprecedented wave of security breaches, systems management has become a major priority. IT organizations are now focused on system management solutions like never before, especially those that include patch management systems for managing updates. One vendor that has established itself as a major player in systems management is Altiris, which recently completed its second round of financing and reported third-quarter earnings of $25.4 million. In addition to launching a patch management system, Altiris also recently signed expanded sales and marketing alliances with Hewlett-Packard and Dell Computer. Altiris CEO Greg Butterfield discussed the impact of security breaches on the demand for patch management systems and the fickle economy's impact on the need for life-cycle management tools in an interview with Editor in Chief Michael Vizard.

CRN: What is Altiris' core mission?

BUTTERFIELD: At the highest level, the value proposition we provide is to help companies reduce the overall cost and complexity of managing information technology. More than 80 percent of the cost of computing is tied to the cost of managing the computer throughout its life cycle, whereas a small percent--less than 20 percent--goes to the actual purchase price of the device. We've tried to identify the things people are doing manually that make up about 80 percent of their cost, and we're trying to eliminate or minimize those costs. We've done that by creating what's known as life-cycle management or systems management technologies.

CRN: What technologies constitute life-cycle management?

BUTTERFIELD: We do hardware and software inventory. We have deployment technology that allows you to put an image on a machine very quickly. We can clone a machine or deploy an image on a machine in 10 minutes, and you can do 100 or thousands of machines simultaneously. We have the ability to do incremental software installs to keep systems up and running to modify software, do patch management and eliminate the problems that come out in software. There's no perfect piece of software.

As a result, vendors provide software updates. We help in that process. We also have remote-control technology that allows an IT person to do remote support, which makes them more efficient. We have help-desk technology. We have self-healing technology that helps in keeping the registry in a known stable state to, in a proactive way, minimize downtime. We have backup software that is somewhat unique in that it allows us to do delta backups for remote mobile users over low-bandwidth lines. And then we have some migration technology for the end of the life cycle. Usually, when a person gets a new machine, they're lucky if they get a hold of files that they saved over the past three years. We have the ability to take the entire personality--which means both data and your personal settings--and save them and then overlay them on the new machine. The thing that differentiates Altiris is that we cover the entire life cycle.

CRN: What impact has the recent wave of security breaches had in terms of focusing people's attention on patch management solutions?

BUTTERFIELD: Companies finally seem to be taking patch management seriously and are now doing something about it. We have customers scrambling to install our patch management products to automate patch assessment and deployment before the next wave of worms and viruses exploit the latest vulnerabilities.

CRN: How does the channel fit into your sales model?

BUTTERFIELD: Our delivery mechanism is very channel-friendly and channel-centric. In fact, more than 85 percent of our business goes through a channel model. In a down economy when many companies have struggled, Altiris over the last three years has had more than a 200 percent compounded annual growth rate. That's all because we have developed a business model that's based upon the channel. We also have strong partnerships with many of the top systems integrators, such as HP Global Services, Getronics, CompuCom, Unisys and Northrop Grumman, in addition to more than 300 Altiris Business Partners.

In addition, we have hundreds of other VARs that buy through Ingram Micro. Our VARs--including business partners and systems integrators--accounted for 48 percent of revenue last quarter. We are recruiting resellers. But the goal is not to sign up thousands of partners and then be a very small portion of their business. The goal is to select fewer partners and be a substantial portion of their business. [Hewlett-Packard] also has several thousand resellers, so we've worked closely with HP to ensure that our channel programs are complementary. In fact, the certification requirements to become an HP reseller now require that the resellers actually receive some management training on the Altiris product. If you look at the VARs, they want to get out of pushing boxes and pumping iron. They want to sell services. Altiris provides the technology that allows them to provide services and make higher margins. That means they can create managed service-provider relationships. They can buy product licenses from Altiris, resell them to the end-user customers and then provide integration, installation and ongoing maintenance of those PCs throughout their life cycles. One of the good things about a down market is that as people extend the life cycles of their PCs, it provides a great service opportunity for the value-added resellers. If I own a piece of technology for three or four years, the cost continues to increase. The break-fix becomes a challenge you have. So they need system management, and they need people to help minimize that cost for them.

CRN: How do you differentiate yourself from competitors?

BUTTERFIELD: Our competitors' value proposition is geared toward the high end, and often it does not include a channel. Our position in the enterprise is that we extend, we enhance and we complement what people already have. We've designed our technology around components, meaning that if you go into an account and they've already implemented some level of system management, we're not going to walk in and say, 'Rip and replace it.' Because our code is componentized, we have the ability to pull out our code that complements what's already in place. We then implement our architecture for free, which then provides for uphill opportunities going forward. People want to deal with fewer vendors, so they would rather have an integrated suite that does all of the life cycle vs. buying 10 different point solutions from six or seven different vendors.