Raxco Has Innovative Recipe for NT Market

Raxco Has Innovative Recipe for NT Market

By Nick Wakeman
Staff Writer

Raxco Software Inc. executives are going after the market for Windows NT management tools with their idea of a winning combination: a new product, reseller and systems integrator partnerships and a simpler customer payment method.

The NT market and the need for management tools are exploding - the number of government and commercial servers running Windows NT is expected to double in 1998 to 2 million from 1 million in 1997.

The market for NT and Unix systems utilities products, like those provided by Gaithersburg, Md.-based Raxco, stood at about $1 billion in 1997, but less than 10 percent represents NT products, according to Philip Mendoza, an analyst with the market research firm International Data Corp. of Framingham, Mass.

Ray Miller
By 2002, the market is expected to hit almost $2 billion with NT-related products garnering most of that increase, he said.

Executives at Raxco, a privately held company that had revenue of $15 million to $20 million in 1997, are counting on the government's growing NT appetite to boost its new NT product, released in June, and to shed the image of supplying only tools for Unix systems, said Robert Nolan, president of Raxco.

Raxco is one of the first companies to release an integrated set of tools for managing NT systems, analysts said. Mendoza said Raxco's biggest competitor likely will be Symantec Corp. of Cupertino, Calif., which makes Norton Utilities.

The lion's share of Raxco's 1997 revenue came from selling its management products for Digital Equipment Corp. servers and workstations, said Nolan, who declined to name revenue targets for the NT product released in June.

"We are optimistic, but after our first full year we'll be able to make better projections," he said.

"The government is really driving the NT market" as agencies replace older legacy systems or augment those systems, he said. "They are buying more NT than anyone else."

Also helping drive the market for management tools like Raxco's is the IT staffing crunch, said Stephen Elliot, an analyst with the market research firm In-Stat Group of Newton, Mass. Because Raxco is combining several features into a single product, it should be popular with systems administrators, he said.

"Rather than using three or four products, they can install just one. It eliminates the learning curve and can save them money," Elliot said.

To go after the government market, Raxco will rely on resellers and systems integrators, said Ray Miller, the company's director of channel sales and marketing. For instance, Raxco will not have its own General Services Administration schedule, opting to push its products through its partners' GSA schedules.

The company is teaming with the distributor MicroAge Inc. of Phoenix. Raxco also wants to sign up 70 or 80 value-added resellers and systems integrators by the end of the year, Miller said.

"The quickest way to get the product in front of customers is through resellers and systems integrators," he said.

In addition, Raxco officials are talking to manufacturers about including the company's latest product among the software they sell with their servers and workstations, he said.

That product, instaNT Pro, allows systems managers to use a single product to remotely monitor the condition of servers and NT desktops for disk fragmentation, security, emergency management and disk registry. Currently, systems managers must buy separate products for each, and many of those are run at the desktop by individual users, analysts said.

Raxco's approach to software licensing also is unique, according to Elliot. Rather than charging separate licensing fees for servers and desktops, Raxco charges only a single fee. "That will be looked at as a positive," Elliot said.

Mendoza likes the fact that Raxco has "a lot of experience with systems management," and trusts the overall management of Raxco, which was founded in 1977.

"Their management has shown they know how to adapt and reinvent themselves," Mendoza said.

In 1996, he said, Raxco successfully spun off its security business into a publicly traded company, Axent Technologies Inc. In 1997, Rockville, Md.-based Axent had $41.6 million in revenues.

John Becker, Axent's president and chief operating officer, is chairman of Raxco's board of directors.

Raxco had to find a new direction because it saw that its traditional business in the mainframe and Unix market lacked strong growth potential, Nolan said.

"Customers were asking if we had an NT product," he said. While Raxco won't abandon its system management products for Unix, he said, future growth is tied to NT.

Nolan said talk about coming to market is premature, adding that such a decision is at least two years down the road.

"If we meet our goals, we will have some enviable growth," he said.

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