The Quest for Windows Share

After dabbling in systems management tools for HP, Oracle and other platforms, Quest Software is now charging hard to be the premier provider of Windows management wares.

And Quest is putting its money where its market is. Earlier this year, Quest spent $115 million to buy Aelita, even though the two firms had significant product overlap. But the Aelita buy got Quest two things, a stronger presence in the Windows management market, and scads of smart programmers in Russia, where 400 coders now reside.

The buy also bolstered some already impressive growth. Quest has performed well in the infrastructure/network/performance management market, according to Softwaremag. com's Software 500 list. Last year key rivals BMC, CA and MicroMuse all saw revenue decline, with drops ranging from 27 percent to 39 percent. Quest grew 23 percent, pulling in more than a quarter billion dollars.

Fun Fact
Aelita was named after the heroine of a 1924 Russian propaganda film.

Quest is continuing that drive this year. For the second quarter, revenue rose to $92.1 million, 30 percent more than the same quarter last year.

Leading Quest is Vincent C. (Vinnie) Smith, who cofounded Patrol Software, which he sold to BMC in 1993 for $33 million. Smith took that dough and founded a VC firm. His first investment? Quest, which he later joined full-time, eventually taking the CEO and Chairman titles that he now holds.

In his nine years with the company, Smith has seen a near-100-fold increase in sales, and similar growth in head count. The product portfolio is growing as well. While a far cry from CA's 626 distinct products, Quest now brags about 90 different tools on its Web site.

Many of these, in fact everything under the Windows Management umbrella, belong to Ratmir Timashev, the entrepreneur who founded Aelita. Timashev was charged with addressing the Quest/Aelita product overlap, killing off three of his own products in the process. In six to eight months, all the Quest and Aelita products will be "fully unified and integrated," he says.

Vinnie Smith
Vinnie Smith

Quest originally built systems management tools for the old HP 3000 minicomputer. By the time Smith joined the company, that market—and Quest—were in decline. "I brought in a business plan to be the leading tools vendor in the Oracle space," Smith explains. Around 1999, Smith realized that market "might run out of size" so he moved over to other databases. Then Smith decided Quest should be "the best management vendor in the Microsoft space, bar none."

That plan seems to have legs. "Close to half of the business is focused on Microsoft, and it is growing fast. A couple years ago it was zero," Smith notes.

So what's next? Quest will be going after provisioning, identity management, security and desktop management, Timashev says. As for specific platforms, look for more support of SQL Server and .NET. And Quest's shopping spree may not be over. "We tend to buy innovative, small R&D-focused companies. We will continue to execute on that path," Smith says.

About the Author

Doug Barney is editor in chief of Redmond magazine and the VP, editorial director of Redmond Media Group.


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