LANDesk CEO Explains Elitist Approach

Once considered a bulwark of PC systems management, LANDesk Software became lost in the bureaucracy of Intel following its acquisition in 1991. Spun out of Intel in 2002, LANDesk has been trying to recapture its former glory as it strives to go public in the next two years. Today LANDesk software is shipped with Intel motherboards and Gateway systems in addition to being sold by 200 channel partners. In an interview with CRN Editor-in-Chief Michael Vizard, LANDesk CEO Joe Wang explains the company's go-to-market strategy.

CRN: How has business been since LANDesk left Intel?

WANG: I have to say that things have gone very well for us. The business under Intel in [those] last two years was pretty flat. But after coming out of Intel, we saw it immediately starting to grow. In 2003, our first year as an independent business, we grew 50 percent over 2002. And this year, we're on track to have another 50 percent growth rate. And every single quarter has been profitable.

CRN: In terms of the technology available today vs. when LANDesk first helped pioneer this space, how does LANDesk stack up today?

WANG: At the time of the spin-off, we did face a market perception that LANDesk equals older technology. The reality is the technologies were not old. At the time, we had software distribution, auto-discovery and remote-control capabilities. Now the market has moved to include some new capabilities such as Web deployment, system migration and software license management. So in the first year, we really played catch-up. We have now broadened our technology by including things like software license management, patch management and cache management. And most recently, we announced our security management suite. We have a very broad base of technologies. The other thing is, we have a history of developing all of our technologies organically. That's unlike some other companies that have entered the space recently by acquiring technologies that don't really work very well together. We're proud of our integration through one interface. All the components work very well together.

CRN: Do you see the systems and security management space converging?

WANG: We just announced LANDesk Security Suite a few weeks ago. Clearly, we've seen a convergence between the system management and the security space. And we are determined that we want to be the leader in that space.

CRN: What differentiates LANDesk as a company from all the companies in the system management space today?

WANG: The top tier in this space is the framework vendors, like Computer Associates, IBM Tivoli, HP and BMC. And then we're sort of the second tier of what we call fleet vendors. And in the third tier are point products like PC Anywhere from Symantec. Those types of products perform one or two management tasks. If you look at the last several years, the midtier products have been growing more rapidly than the other two tiers. The market as a whole has been growing in the high single digit range, about 8 or 9 percent. Obviously, we've been growing in the last couple of years much faster than the market average.

CRN: When it comes to competing with framework vendors, how do you stack up?

WANG: It takes less then three months for a company to obtain an ROI with us. In other words they get their money back in three months. If you use the framework product, it will take a couple of years before you can start to use the product because the installation process is so long.

CRN: How does your approach to the channel differ from your rivals?

WANG: We're the only one in our space that's 100 percent indirect sales. Our partners provide services around our products and then, together, we provide a solution to the end user. We have a two-tier program, so we don't go through distributors. Worldwide, we only have about 200 channel partners. So basically we only have a very select group of partners in the program. We have a channel program that not only provides good margin to our partners, but is also a win/win partnership where we help them grow their business -- and then we grow our business through the growth of their business. Our partners make money on services. As a result we have very good margins and over two-thirds of our sales are new product licenses.

CRN: Do you worry that you are limiting the growth of the company by limiting the number of channel partners selling LANDesk?

WANG: It's not limiting the channel partners. It's being selective in making sure that the channel partners don't just sign up as anybody who wants to sell our product. When we sign up a partner, we require that this particular company have dedicated LANDesk sales engineers. As a result, we have dedicated people. We have specialized channel partners.

CRN: How many partners do you think you will have in the program by the end of 2005?

WANG: I would say that by the end of 2005, we'll still have probably fewer than 300 channel partners.

CRN: Longer term, do you worry that Microsoft and other platform vendors will be more competitive in this space?

WANG: Microsoft and the rest of that world have not shown signs of providing both security management and system management from the same platform. Maybe they will decide that it's a good thing to do. Maybe they won't. Our business model will continue to thrive. We provide much broader capabilities than the one or two functions, so I don't see any problem for a company like LANDesk to continue to grow.