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TWST: Please introduce us to your company.
Mr. Nynens: In terms of Programmer's Paradise, the first important thing
I want to talk about is that the name is going to change to Wayside
Technology Group. Wayside Technology Group will consist of three
separate divisions; Programmer's Paradise, the number one rated software
development tools and components reseller for the development community
in the United States and Canada, Lifeboat Distribution and TechXtend.
Lifeboat Distribution is a wholesaler, and provides a low cost entry
point for extending product market reach through our extensive network
of corporate resellers, VARs, consultants and system integrators through
our rapidly scalable channel service capabilities. TechXtend is a new
subsidiary specifically focused on providing solutions and onsite
services. We will launch this subsidiary July 1, this year. Our
consultants will provide on-site services to enterprise organizations,
mainly relating to server consolidation, development and testing and
business continuity and disaster recovery and backup. We offer software
from about 700 different software publishers. We are 90% software.
Hardware is an add-on service from us. We were founded in 1982, we
generated sales of $138 million in 2005, and we ranked number eight on
BusinessWeek's list of hot growth companies in June 2006. TWST: Is this a reorganization of parts that you already have inside the
company today or is this a result of merger and acquisition activity or
a combination?
Mr. Largiader: Two specific examples of opportunities that span beyond
the software development community with two of our better partners:
first, Computer Associates ' we have been doing extremely well with them
in marketing and selling their AllFusion data modeling line of products;
as this relationship burgeoned, we also developed relationships with
other sectors of their company focusing on security and backup software
but did sometimes run into walls, as Simon said, whereby the people we
are working with both at CA and the customer would typecast us as a
software development reseller and not a typical source for those other
products. But the opportunity certainly in MDF funding and relationship
building was there, so we wanted to break away from being hindered
there. So that's a CA example. Another example would be EMC's VMware.
VMware would look to us to market their original product, which was a
desktop virtualization product, a very good tool for software
developers. Subsequently, VMware came out with products that really
operate much more so on the server side in partitioning servers, making
better use of them and actually reducing costs as the number of servers
you need goes down. This also developed into a services opportunity. So
there were also different opportunities there and because of our strong
partnership we were able to migrate into them. We've built a nice
services business already, supporting what's called VMware ESX software
now, but again, we are hindered when we go to market by the fact that
customers look at us, go to our Programmer's Paradise Website and say,
no, you are not the type of company we expect to be supporting our IT
infrastructure, so some opportunities we might have otherwise pursued
just don't happen. So it seemed like a perfect opportunity to go ahead
and form a new subsidiary whereby that subsidiary can concentrate on
more IT infrastructure opportunities and services versus Programmer's
Paradise. We also certainly wanted to stay pure with Programmer's
Paradise because when you own a niche, the one thing you don't want to
do is spread yourself thin and try to be more than what you are as the
dominant player in that niche.
Tickers included in this excerpt: PROG
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