IBD Article:
Investor's Business Daily
Internet & Technology
Friday, November 3, 2000
Company Builds New Ways To Retrieve Computer Data
by Patrick Seitz
OTG Software Inc. has had a milestone year.
The maker of software for managing and accessing data went public in the spring. Since then, it has shown strong sales and earnings growth and has plowed into several hot new markets. Its third-quarter sales of $12.1 million represented an 83% increase from the year-earlier period. Profit totaled $2.8 million, or 10 cents a share, up from $183,000 or 1 cent.
The 8-year-old company, based in Bethesda, MD, differs from others in the storage market by focusing on products that let customers access their data from any computer application over any network and any storage hardware.
Its rivals, including Computer Associates International Inc. and Veritas Software Corp., are more concerned with backup and protection of stored data than with quick and easy access to that data, says Richard Kay, OTG Chief Executive.
OTG has unveiled a flurry of products this year, targeting such areas as application service providers, storage area networks, and e-mail management. That should keep the company growing fast, he says.
Kay recently spoke with Investor's Business Daily about the company's progress since its IPO.
IBD: In a nutshell, what's OTG's business?
Kay: Our products let customers access data automatically and seamlessly over any network, including the Internet, and from any application.
We have other core technologies that allow them to store that data, index it and retrieve it as needed under any media type. We work in all storage environments, including RAID (redundant array of inexpensive disks), tape, optical, CD, and DVD-RAM.
IBD: What differentiates OTG from others in the business?
Kay: If you talk to the competitors - CA, Veritas, EMC - they say they do everything in storage. But in essence, they're really focused on backup and protection.
That was very important during the Y2K scare, but now people want access to the information without having to wait.
IBD: Are you partners with any companies that might be seen as competitors?
Kay: Yes, IBM and its unit, Tivoli. They're the largest backup and storage company out there. Also, Data General, which is now owned by EMC, and StorageTek. We're either doing deals with all of them or talking to them.
IBD: Why can't those other companies just do what you are doing?
Kay: There are a bunch of barriers to entry. For example, CA and Veritas, all they do is backup data to tape and a handful of devices. We can work with RAID, tape, optical, CD, and DVD.
We have about 600 devices certified, so we have a very horizontal approach. For others to certify all those boxes, it could take 26 man years.
Plus, we're the only ones focused on accessing data from applications.
IBD: How have you done so far as a publicly traded company?
Kay: We went public March 10, the day after the Nasdaq hit 5,000. We were very fortunate to have done that. Obviously, we had a tremendous pop the first day. We priced at $19 and closed at $56 (OTG is trading near $30).
We just finished our strongest quarter ever. We achieved substantial boosted revenues and profitability. And our new products will help continue our growth. We're growing at double the industry rate.
IBD: What new markets is OTG pursuing?
Kay: In the second quarter, we released OnlineStor.com, which is our application service provider program. It takes our core technology and runs it through standard data center ASP environments so you can outsource and store your data (with a contractor).
Another big announcement for us was the company's e-mail storage product, EmailXtender. We all know what's been happening with e-mail around the world - from viruses and the network bottlenecks to the file-size restrictions and warnings from the network administrator that you have too many e-mails. We've solved all those problems.
We think e-mail storage management is going to be the hot area coming up.
IBD: How does your e-mail product help with information retrieval?
Kay: Let's say you're looking for a business prospect and you know that it was embedded in an Excel spreadsheet when you were running some numbers, and that spreadsheet was part of a Word document that was part of an e-mail. All you'd have to do with EmailXtender is type in the company name, and all the e-mails, all the attachments and all the spreadsheets associated with that would automatically come back. |
