Avocent purchase will bring LanDesk into the data centre

Avocent Corp. known for its SwitchView and AutoView KVM devices that control desktops and servers and its Equinox hubs, has reached a deal to buy LanDesk Software in a US$416 million cash and stock deal, the companies said Thursday.

LanDesk, an Intel spin-off, makes a wide range of applications allowing IT managers to remotely control, patch and inventory desktops, servers and mobile devices. It also has moved into business process management applications with its Autobahn software, which lets users design a business process workflows in a drag-and-drop environment.

The deal with publicly-traded Avocent, which could increase by up to US$60 million if LanDesk can meet certain financial targets, would close within 60 to 75 days.

The companies will operate separately for the time being, with LanDesk a division of Avocent.

The purchase is being portrayed by the companies as a way to allow them to get deeper into organizations as well as a way to offer more products from one company to IT managers.

”It gives us (LanDesk) reach into the data centre,” Dave Taylor, the company’s vice-president of worldwide marketing, said of the deal. “From their perspective they had this great real estate in the data centre and they needed more value-added services. Together our two companies cover all of the infrastructure pieces – servers in the data centre, networking gear, desktops, laptops, handhelds.”

Many LanDesk channel partners will also be pleased, Taylor said. “They have been focused primarily on a software sale. This is an opportunity for some of those who have more hardware expertise to really stretch out a little bit . . . I think they’ll jump all over it.”

For the time being the two companies’ channel programs will not be merged, he also said.

With their combined resources the new company could create so called always-on management solutions, both companies said in a joint news release announcing the purchase.

Taylor speculated they could create “manageability appliances” for specialized markets, such as small and medium-sized businesses.

Avocent, which sells its own branded products through the channel as well through OEMs, faces several competitors in the KVM market include Raritan. LanDesk’s competitors include Microsoft’s Systems Management Server), Novell’s ZenWorks, Marimba (acquired last year by BMC Software), Hewlett-Packard and Symantec (through its 2004 acquisition of ON Technology).

LanDesk is a privately-held company whose largest shareholders are two venture capital companies and Intel, but Avocent trades on the Nasdaq. It reported today that its net sales for the first quarter were US$94.5 million, up 23 per cent from the same period last year. Operational income was US$12.9 million.

Comment: info@itbusiness.ca

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