Why so hot?....MARIMBA(MRBA)
Mountain View, Calif.-based Marimba is in the hypergrowth industry of
systems management solutions. The company's main product, Castanet,
makes tools that allows users to distribute software over the Internet.
Essentially, the software helps companies distribute software upgrades to
every desktop in the firm from central services. This solution avoids the
time-consuming effort of delivering new software packages to every
location and installing the software.
Marimba's client list includes discount brokerage
house Charles Schwab (SCH: news, msgs),
Internet service provider EarthLink (ELNK: news,
msgs), Home Depot (HD: news, msgs), Sun
Microsystems (SUNW: news, msgs) and Intuit
(INTU: news, msgs).
Marimba's Castanet software allows Intuit to
upgrade its Quicken product for its customers.
Most of its products use the Java programming
language, developed by Sun, which makes them
more versatile among the gamut of software
systems, the company says. Polese was the product manager for the Java
computer language while at Sun. Marimba also licenses digital-certificate
security software from VeriSign (VRSN: news, msgs).
Marimba's pedigree includes backing from noted Silicon Valley venture
firm Kleiner Perkins Caufield & Buyers. Douglas Mackenzie, a general
partner with the investment group, is a director at Marimba.
Providing systems solutions for corporations is promising. Tivoli, a
subsidiary of IBM (IBM: news, msgs), has been Marimba's primary
reseller since 1997. While Tivoli's sales account for 1.3 percent of IBM's
total sales, it is growing 50 percent annually. Analysts don't expect Tivoli
to enter Marimba's space.
"It's difficult for other firms to enter the market because the company has
had a two- to three-year head start and the intellectual property," said
Tom Berquist, an enterprise software analyst at Piper Jaffray.
Berquist said other potential competitors include BMC Software (BMCS:
news, msgs), Microsoft (MSFT: news, msgs) and Computer Associates
(CA: news, msgs).
"However," he said, "these companies are involved within the firewall --
or inside the organization -- not outside the organization, which is what
Marimba focuses on."
Berquist also projects Marimba's business opportunity to grow into a
$500 million to $1 billion industry over the next two to three years. This
growth, he said, leads him to believe the "rich" valuation given the stock
may be justified.
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