I only started following this company last week so I can't claim to be any kind of expert on Remedy or the market, business they are in. And
admittedly a lot of my insight is more intuitive than factual.
This is one article from which I received some good insight as to what remedy does and how they are ahead.
I would define leading technology as a product or system that in all aspects is deemed superior (in usability, ease of use, adaptability) to its competitors products.
Document 52
AN IBDY9533100021
HD The New America
* REMEDY CORP.
Mountain View, California
Making A Connection Between Problem, Solution
C. Kinou Treiser
* Think of Remedy Corp. as a 911 service for your computer troubles.
WC 725 Words
CC 4866 Characters
PD 11/27/95
SN Investor's Business Daily
PG A4
CY (Copyright Investor's Business Daily, Inc. 1995.
To Subscribe Call (800) 733-8900.)
LP The company develops software that automates the tracking and
solving of problems on computer systems.
Its lead product, the Action Response System, will automatically
flag trouble with a call, fax or page. And if it's a recurring
problem, the system will remember the solution for anyone to key
in. No more panic when your technician is off fishing.
TD "It's a must for keeping up productivity," said CEO Larry
Garlick, a former Sun Microsystems Inc. executive with roots at
Xerox Corp.'s Palo Alto Research Center, incubator of today's
computer technology.
He and David Mahler, a former Hewlett-Packard Inc. executive,
began the company five years ago when most help desks were already
lost under mounds of yellow sticky notes.
The two reasoned that as networking developed - adding more
hardware and more risk to computer systems -help desks would have
to automate. In fact, the need to keep all components up and
running increases as applications are distributed from the
mainframe throughout the client/server system. The internal
help-desk market, estimated to total between $200 and $300 million,
is expected to double over the next three years.
Some 2,000 companies have installed the Action Response System,
including half of Fortune's top 50. That makes Remedy the number
one player in a field that numbers less than a dozen, says Dakin
Securities Corp. analyst Ed Bierdeman.
*
"Their installed base is six times the size of Scopus Inc," he
said. (Scopus, which surged 75% to 21 in its trading debut ten days
ago, closed Friday at 171/4.) Clarify Inc. and Inference Inc. are
other rivals who, while trailing the field, are also claiming
market share.
"We're in a period of rapid expansion," Bierdeman said.
"Eventually, that's going to lead to consolidation and a shakeout.
And I've got no doubt that when we get through it - Remedy will
still emerge the leader."
While others spend time and money wooing head-office honchos,
Remedy finds a ready entry with one phone call to the
computer-services department.
Offering overworked support staff a free trial, it's not long
before Remedy's made the sale, "with the (department) manager
signing the check," Bierdeman said.
Once inside, the AR System fans out across the corporation,
adapting itself to other departments' needs.
Transforming itself into the "anything tracker," the AR System
has been directed to cover everything from sales records to nuclear
waste storage.
"We let the customer discover the product," Garlick said. "And
do some of our marketing for us."
As a result, Remedy contracts, which start at a base price of
$6,500, usually rise to between $25,000 and $35,000.
In addition to its low sales costs, low support costs have
helped the company cinch the best operating margins in the
industry, according to both Bierdeman and Hambrecht & Quist Inc.
analyst Neil Weintraut.
*
Remedy's clients install its software themselves, while "other
vendors have to put an engineer on the plane to install their
software for you," said Weintraut.
"That's helped Remedy lift its operating margins to around 23%,
compared to an average 15% in the rest of the industry."
That margin lead allows Remedy to plow 20% of its profits into
R&D. The company doesn't have a lock on the architecture that gives
the AR so much flexibility.
Its partnerships are an another factor in its favor.
Remedy has strong relationships with value-added resellers and
system integrators, as well as with Garlick and Mahler's old
bosses. Hewlett- Packard and Sun Microsystems have created
integrations for the AR System.
*
The Mountain View, Calif., firm has an Earnings Per Share rank
of 99 - the highest possible. Third-quarter earnings rose 100% to
22 cents a share -eight cents higher than expected. Sales jumped
105% to $10.2 million.
Earnings in 1994 advanced 69% to 44 cents a share. Bierdeman
forecasts profit this year will rise 79% to 74 cents a share, and
another 21% to 90 cents a share in 1996.
"The emergence of the Internet, and the availability of Remedy's
AR Web, creates upside potential to Remedy's story," he said. "It's
allowing people to use the Remedy application from anywhere in the
world, at any time."
For example, a remote manager wanting to compare local
production with that of the company as a whole, would have instant
access to the necessary data. And he'd also save on the cost of
having that data hard-wired in. |
