Five years ago, Concord Communications Inc. saw a niche in network performance reporting, something big net management platform vendors such as Hewlett-Packard Co. and IBM Corp. had missed. Concord exploited that niche with its Network Health software and has since become a $40 million company that is king of the hill in that market. Now Concord CEO Jack Blaeser is setting his sights on $500 million in revenue. Network World Senior Editor Jeff Caruso recently caught up with Blaeser to find out more.
Network World: You say you'd like to increase Concord's revenue to $500 million in three years. How do you plan to do that?
Jeff Caruso: Our basic strategy is to focus on optimizing the experience that the customers of our customers have when they either click on the URL or hit their Enter key.
We have very good technology that scales and is flexible. But to grow the company to the size I'm trying to, we have to move into applications, services and systems. Empire, our first acquisition, moved us from networks into applications and systems.
You'll also see us expand our professional services organization because as our solutions get bigger and more complex our customers will need more handholding to make sure it's done properly. We'll expand our technology base through acquisitions. We hope to make two or three acquisitions this year.
NW: How is the merger with Empire Technologies going?
JC: We're in the process of hiring additional resources for Empire - such as sales and marketing folks, and development people - to broaden its product.
Empire's technology is probably more elegant, but it's obviously not nearly as comprehensive as what BMC has.
NW: What kind of companies are you looking to acquire?
JC: The target would be a company that's slightly bigger than Empire - more than 10 people but probably less than 100. It would have to have a technology that somehow helps us more effectively manage an e-business problem. That could be technology within the client, Web servers or database servers; a real-time capability that helps us more quickly isolate a problem; or a correlation technology so if you have a failure, it identifies which failure caused all the thousands of red icons to appear on your OpenView screen. It will probably be a company that has technology that's ready to go to market but doesn't have a distribution and sales channel to effectively do it.
NW: From a technology standpoint, what are the things that management companies like Concord have to do differently to help companies manage e-business environments?
JC: One is scale. When you're talking about e-business, you're talking about tens of thousands of things you've got to manage in large enterprises and service providers. We have development underway to help us manage millions of elements in a seamless solution.
You have to integrate information you see in the client with what you see in the network cloud, network infrastructure, services, systems and applications - and present it in a way that can quickly lead to action to fix problems.
You also have to make all your solutions have the lowest administrative footprint possible. Although the problem's getting bigger, the IT organizations of enterprises and service providers are not growing as much. The product has to be very easy to administer by a reasonable number of reasonably knowledgeable human beings.
NW: Concord is taking different capabilities and putting them all in one place.
But isn't that what management platforms like OpenView and Tivoli already do?
JC: The platform people overcommitted. Years ago they said, 'Give me $15 million or $10 million, and I will solve all your problems.' They probably solved a reasonable number of problems, but they obviously didn't solve all the problems.
There are things that we're not going to do. We have no interest in software distribution, inventory and asset management, element management or help desk software. The platforms do all that stuff. We're going to focus on optimizing performance.
NW: How does Lucent's acquisition of INS affect Concord?
JC: INS has been our most visible and biggest competitor, so we were happy that a hardware company bought it. Lucent's a large company and has great resources, but its strategic direction is selling hardware to carriers, service providers and enterprises. But with resources, INS could be more of a competitor, rather than less.