Tivoli Systems Refines Integrator Strategy

Tivoli Systems Refines Integrator Strategy

Martin Fredrickson

By Richard McCaffery, Staff Writer

Tivoli Systems Inc. is sweetening the pot for a small group of systems integrators to better drive sales in the federal market, company officials said.

The Austin, Texas, company, which makes network management software, has 23 integrator partners but is now signing business partner contracts with a few that have committed resources to building Tivoli practices, said Martin Fredrickson, Tivoli's director of federal government sales.

Chief partners will include Booz-Allen & Hamilton Inc., Lockheed Martin Corp., McBride and Associates Inc., Science Applications International Corp., SRA International Inc., Telos Corp. and Unisys Corp.

These partners will get incentives such as product discounts, special training, lead lists and perhaps even exclusive territories. In return, Tivoli gets partners with trained technical personnel as well as sales people responsible for driving Tivoli products.

In the past, some integrators relied too heavily on Tivoli for contracts, Fredrickson said. "What we really found was we were driving all the sales, and they were looking for us to hand the sales over to them," he said. "What we're really looking for are companies that have a full commitment."

SRA International of Fairfax, Va., for example, formed a partnership with Tivoli in February 1998 and created a business unit with 15 engineers and sales people focused on pushing Tivoli products, said Richard Spires, SRA's senior vice president for strategic partners. By June 2000, Spires expects the team to grow to 100.

This is the kind of integrator partnership Tivoli wants in the federal market, Fredrickson said.

"SRA views [the business unit] as a very important part of our business," said Spires, who noted that growth of network management software is being driven by the expansion of mission-critical systems that run on distributed networks.

Related contract wins for SRA in 1998 include a $2.3 million task order at the IRS under the Treasury Information Processing Support Services contract. In September, SRA won the one-year deal to provide technical and project management support bidding Tivoli software. SRA is the prime contractor.

The 80,000-seat task order is SRA's largest award bidding a Tivoli product so far. It is also one of more than a dozen task orders SRA has under way at the IRS, said Eileen Clark, SRA's TIPSS program manager.

Founded in 1989, Tivoli makes software that helps companies manage information technology systems. Its Enterprise product allows network managers to monitor networks, analyze systems and search for problems from a central location.

The performance management industry has grown rapidly in the last 10 years as companies moved away from mainframe systems to distributed networks. Tivoli grew rapidly, too. It went public in 1995 and was scooped up by IBM Corp. of Armonk, N.Y., in 1996 for $743 million. It is now an IBM subsidiary.

Analysts estimate Tivoli had $1.5 billion in worldwide sales last year, up from $1 billion in 1997. Its government division accounts for 18 percent of Tivoli's North American sales, Fredrickson said.

Competitors include BMC Software
Inc. of Houston, Computer Associates International Inc. of Islandia, N.Y., and Landmark Systems Corp. of Vienna, Va. Another competitor, Boole & Babbage Inc. of San Jose, Calif., was purchased by BMC March 30.

Fredrickson declined to disclose revenue for Tivoli's federal division, but he did say the unit has doubled its sales every year since 1994, and he expects to top $100 million by the end of 1999.

Tivoli entered the federal market in 1994 and started selling software directly to agencies such as the departments of Defense and Treasury and the Environmental Protection Agency. Its business is split evenly between the military and civilian branches, Fredrickson said. Currently, Tivoli systems are being rolled out in 45 government agencies and programs.

One analyst said Tivoli's integrator strategy makes sense.

"One thing enterprise management companies do is partner with the best integrators," said Christopher Desautelle, communications and enterprise software analyst at Legg Mason Inc. in Baltimore. Focusing on a few partners should help the company better penetrate the government market, especially at smaller agencies that can be more difficult to reach, he said. "That's one of the best ways to sell to the federal government," he said.

In addition to its integrator strategy, Tivoli's federal division continues driving more business through the sales channel to penetrate a host of government agencies.

This is a sharp turnaround for a company that sold 90 percent of its software directly 18 months ago. Resellers now account for 30 percent of its sales, and Tivoli officials expect that number to grow to 50 percent within two years.

"We've done very well with the large agencies," Fredrickson said. "We'd like to take the large wins and drive down sales to the smaller agencies. ... That's a wonderful model for channel partners."

Tivoli is targeting smaller agencies across the board, such as the Federal Communications Commission and the Securities and Exchange Commission.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above.

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.


contracts DB