Nimsoft: Same Strategy, New Leadership, 80 Percent Growth

When CA Technologies acquired Nimsoft about 15 months ago, I openly wondered if CA would suffocate Nimsoft's corporate culture and business strategy -- which involves selling managed services software into the midmarket. Instead of killing Nimsoft, CA maintained a hands-off approach and Nimsoft flourished. But more recently, a new challenge has popped up: Some of Nimsoft's top talent -- including former CEO Gary Read and former VP Phil LaForge -- have left in recent months. So how has Nimsoft responded?

Apparently, pretty darn well. According to a recent blog post by Forrest Research's Peter O'Neill, CA over the past 15 months has helped Nimsoft to:

  • double its headcount;
  • grow revenues 80 percent;
  • sign up 240 new customers; and
  • grow its managed service provider base from 250 to 420 firms.
I rarely quote research firms because, generally speaking, I think some research firms often tell us what we already know. But O'Neill has gathered some stats that I haven't seen elsewhere. And generally speaking, I've respected Forrester since I started in this business in 1992, working for InformationWeek.

$50 Million and Beyond

Using the stats from Forrester here's some quick math: I think Nimsoft was roughly a $30 million company when CA stepped in to buy the firm. Assuming revenue really has grown by 80 percent, that would put Nimsoft's current annual revenue run rate at about $54 million -- unconfirmed, of course.

More recently, Nimsoft acquired an IT service desk/help desk company and the results appear promising. MSPs such as MSN Communications and App Associates are deploying the service desk. Those are two very sophisticated MSPs -- MSN Communications focuses on Cisco and unified communications, while App Associates offers Oracle-centric managed services. (Disclosure: App Associates and MSN Communications described their strategy earlier this week during an MSPmentor webcast, sponsored by Nimsoft.)

App Associates and MSN Communications reinforce Nimsoft's secret to success: The company has always targeted midmarket MSPs, steering clear of the SMB wars that frequently involve Kaseya, LabTech Software, Level Platforms, N-able, Zenith Infotech and other RMM (remote monitoring and management) software companies.

Generally speaking, when I think of Nimsoft I think of monitoring data centers and environments like VBlock and VCE (VMware, Cisco, EMC), rather than small businesses.

Evolving Management

Nimsoft's latest chapter involves evolving management. CA veteran Chris O'Malley replaced Nimsoft Founder Gary Read as Nimsoft's CEO back in April 2011. More recently, Nimsoft VP of Service Providers Phil LaForge resigned to join an MSP that's focused on mergers and acquisitions.

Change in the executive ranks is never easy. But, generally speaking, it sounds like Nimsoft continues to execute its business plan. Familiar Nimsoft names like Ken Vanderweel, marketing director for service providers -- keep Nimsoft focused on its core target: Midmarket MSPs. And industry veterans like Sandeep Soman, senior principal product manager, are pushing Nimsoft deeper into the service desk market.

Bottom Line

I live about 10 or 15 miles from CA Technologies' headquarters. In the 1990s, I saw CA botch a few acquisitions -- which alienated some CA channel partners along the way. But CA seems sincere about maintaining Nimsoft's focus and culture intact. Roughly 15 months since CA acquired Nimsoft, it's hard to argue with the results so far.
TAGS: Financing RMM
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