Serena Software CEO To Drive Growth Through Expanded Channel

Given all the interrelated elements of distributed systems, one of the biggest challenges in IT is managing change. This means opportunity for solutions providers that can help IT organizations manage change and updates to applications across distributed systems. One of the leading providers of tools in this space is Serena Software, which earlier this year acquired the change management assets of Merant. In an interview with Editor In Chief Michael Vizard, Serena CEO Mark Woodward explains why, after already signing up partners such as IBM Global Services and SAIC, that doubling the number of active channel partners selling change management tools is a cornerstone of the company's growth strategy.

CRN: There's a lot of talk these days about how on-demand or utility computing models will make systems easier to manage. What makes change management tools a strategic product today?

WOODWARD: When you boil that down to what it takes to develop and deploy software applications, on-demand or utility computing just adds complexity. That is really what our products do--[they] allow companies to manage complexity, especially when you've got hundreds of even thousands of people working on an application. When all the pieces come together, you need to make sure you get the exact version and the exact release of every module and program that needs to come together to create the whole application. We believe you cannot do it without technology like ours.

CRN: What are your goals in terms of the channel?

WOODWARD: We recently signed a worldwide resale agreement with IBM Global Services last quarter. But the average deal size of a lot of our products is under $10,000 dollars. In the last year, the channel was our single biggest investment in terms of internal resources. We've been doing 20 percent of our revenue through channels and we want to double that. We want to get up into the 35 percent to 40 percent range. We see greater growth from independent channels than we will from our direct-sales force over the coming years. In terms of partners, I think that Serena itself probably had about 30 and Merit had probably about the same. In terms of those who are active, it is probably about half of those. Our goal is to get over 100 this year. We're talking about putting some serious money in terms of developing our channels.

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But a strategy of just instantly trying to sign up as many partners as you possibly can straight out of the gate, can actually be a losing strategy because it is not just about getting them signed up. It is getting them trained. It is getting them proficient on your products. The channel is, depending on the product, really good at fulfilling demand. They are not as good at creating demand unless you pay enough attention to the partners. You have to give them the right kind of marketing support and training. Our plan is to focus on a smaller number of partners that can be very successful coming out of the chute. We need to give them the right level of marketing assistance to make sure they can start to actually create some demands for us.

CRN: How has Serena changed in the last year?

WOODWARD: In the last year, we have moved the company from solely being focused on enterprise change management to a broader focus of applicationwide cycle management. If you look at what we do today, instead of just managing the code, we're moving up a level to serve a customer on a broader basis that allows them to start managing the application from the initial request for a change or the development requirements for a piece of technology, and then take that all the way through to the final delivery of that software to the end user.

Our first move into this area was the acquisition of Teamshare last year that allows people to define the process for things like request management, issue management and bug tracking. We now have that integrated with all of our change management products.

CRN: What drove the Merant acquisition?

WOODWARD: We started looking at potential acquisition targets to help us move through in this application life-cycle management space and grow in terms of size and as quickly as possible. The acquisition became just an absolute natural for us because Serena was dominant in mainframe change management but wanted to grow in the distributed space, so it was just a pretty natural merger for these two companies to come together.

What we have right now is the integrated company that has by far the broadest platform to allow us to deliver change management technology to any user within the enterprise, whether it is a single user, small development group, a large distributed development group or a large enterprise mainframe. We're second to only IBM in terms of market share. The third player is Computer Associates, which in terms of market share is less than a third in terms of where we are. And we certainly took market share away from virtually everybody in the last year.

CRN: What are your goals for the company?

WOODWARD: One of the company objectives that we had as part of the strategic plan is to endeavor to be number one or number two in every market that we service and to get the company to $250 million dollars in revenue.