Growing Altiris to Over $1 Billion

Altiris is a great example of what happens when a company is aligned and the leadership in the company works with the employees, the board of directors, and shareholders to create value for customers.

As is noted on the Altiris Web site, “Altiris was founded in 1998, although its roots began in the early 1990s, to develop solutions that reduce the cost and complexity of managing the IT lifecycle. While numerous vendors on the market were developing complex management solutions that were costly to both purchase and implement, Altiris took the approach of developing modular solutions that allowed customers to only purchase what was needed and easily add other Altiris solutions in the future for a quick return on their investment.”

Greg Butterfield was the CEO, Dwain Kinghorn was the CTO, and Steve Erickson was a CFO. As an executive team they worked to make sure that engineering, sales, and support were all in alignment. The portfolio rationalization only worked to the degree that sales training, sales compensation, and partner enablement all sang the same song. The revenue grew quickly, moving from less than $5M in 1999 to over $320M for 2007 (as part of the Altiris Business Unit within Symantec).

Because of the revenue growth that Greg, Dwain, and Steve were able to manage, the company was able to secure venture capital in 2001-2002 and did a successful IPO in May of 2002. May 2002 was a very difficult time to do an IPO given the overall market conditions, however because of the strength of the go to market plan supported by award winning products the company was able to continue to grow revenue quarter after quarter.  The management team was able to confidently discuss with shareholders the plans for growing the revenue because they put all the metrics in place to track the sales funnel.    Altiris made sure there was a product development lifecycle methodology that was in place to deliver new products.   And the necessary corporate controls were in place to ensure that there was proper legal and finance review of all company business.

Merger and acquisition activity was also a key part of the Altiris success story. There were company and technology acquisitions that occurred each year that Greg was the CEO. Because of the success in growing revenue, the company was able to use cash generated from sales as well as stock as a way to grow the portfolio through acquisition. There was a sound process in place to help make sure that each company that was acquired had a solid integration story before the deal was closed. The entire management team was consulted and involved in the details of any transaction once a potential candidate was identified. “I recall many staff meetings with very open and direct discussion about a potential acquisition candidate,” says Dwain Kinghorn. “There were a many discussions that involved a lot of debate as to the merits of a deal. Ultimately we knew that if all of the executive team was not on board it would not be successful. The one deal that we did that was our least successful was the one with the least amount of executive review as to portfolio integration and a go to market plan prior to closing the transaction.  There are no shortcuts in good M&A activity.”

Another area that was critical in the success of Altiris from 2000 and beyond was the establishment of strategic go to market alliances. Greg and the rest of the executive team knew that on its own Altiris could never hire enough sales staff quickly enough to be able to keep ahead of the competition from Microsoft, Computer Associates, BMC, and others. It was the formation of alliances with Compaq and then HP as well as Dell that provided quicker access to worldwide markets.   Altiris also built go to market partnerships with the service providers that built a business in conjunction with Altiris/HP and Altiris/Dell that provided leverage. “We had to make sure that the whole engineering team knew what the partners needed, and we had to make double sure that the sales team compensation plan revolved around supporting those key relationships,” says Steve Erickson. “When you first glance at the financial model it may seem that giving away so much margin to a channel can hurt you.  In Altiris’ case, we were all aligned to make sure that the investment in the relationships brought the necessary increase in revenue to support the model.”

In early 2007 Symantec announced their plan to acquire Altiris. That transaction happened in a relatively short amount of time. As Greg likes to say, “Good companies are bought, bad companies are sold.” In the less than 5 years from the IPO, Altiris shareholders were able to see their shares go from $10 to $33. The level of performance where revenue rose quarter after quarter, alliances were grown for worldwide go to market partnerships, and the technology was built to support the business model lead to the acquisition by Symantec. “The Altiris portfolio is a natural fit within Symantec,” said Greg. “In fact, the go forward cross product integration platform within Symantec is built upon the Altiris technology.”

Altiris shows that alignment among the senior and a lot of hard work can result in a great deal of success. These same principles and background are carried forward as part of the SageCreek engagement.