Faronics reports rapid growth in power management, plans new functions – but 1E leads the pack

Analyst: Andy Lawrence
Date: 13 May 2009
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Event summary

· Privately held Faronics doesn't reveal exact revenue figures, but in 2008, sales of its desktop management product surged by more than 600%. It expects sales to double again in the next financial year. It has over half a million seats under management.

· Its technical roadmap includes support for a greater number and variety of power-use policies, graceful shut down of open documents, controlled spin down of hard disks and support for Intel VPro.

· Faronics revealed that more than half of its sales in the public sector, where it is strongest, are supported by utility energy-saving financial incentives. Buoyed by recent success, Faronics is considering increasing its prices.

The 451 take

Faronics continues to add a lot of features to its products – some to catch up, and some to give it an edge. With revenue growth like this, it is clearly a formidable player, although its total sales are some ways off the market leader, 1E. One question is whether Faronics should, or will, seek to capitalize on the surge in power management by attempting a higher-risk push into new markets where it has little presence – such as corporate desktops. Even if it stays in its niche, it should continue to thrive for the next several years, having established its brand and technology to ward off new entrants. High interest in its Power Save product is also helping with sales of its Deep Freeze systems management tools.

Details

Faronics' Power Save is similar to rival products: a centrally located server can shut PCs down and wake them up according to a schedule or policy. An agent is installed on each PC to detect activity and control the local power settings. Power Save is unusual, in that it can detect CPU and disk activity as well as mouse and keyboard activity – and it runs on AppleMacs as well as Windows. Power Save is managed through Faronics' core console, which can also manage other products, such as its market-leading Deep Freeze (which restores each PC to a preset configuration on each reboot).

The new features planned for Power Save are mostly incremental. They include the ability to set multiple power policies (for example – more lenient during the day, more aggressive at night) and to specify how long a disk is inactive before spinning it down, the saving of open documents before shutdown, the application of power-saving policies to a user rather than a machine and the ability to specify different power settings for laptops. Power Save will also support Intel's VPro.

Regardless of Windows tools and management diktat, most PCs spend long hours using energy unnecessarily. When thousands of desktops are involved, the financial and CO2 savings can be substantial. Add the generous support from 28 utilities, and it is not surprising that sales are strong.

Faronics sells mostly to the public sector, an area that is surprisingly complex and involves large numbers. In order to attract more corporate business, Faronics is targeting CEOs, CFOs and COOs, as well as CIOs (who often don't see power bills). Low prices have helped sales, but with Power Save priced as much as $10 per seat below rivals, increases are possible.

Where does Power Save go next? Faronics is staying out of datacenter management, but sees an opportunity to control peripherals, such as power-hungry projectors and printers. However, most are not intelligent enough to be switched off and on centrally.

Competitive landscape

Given the lack of market numbers and sales data, it is difficult to accurately divide up the increasingly competitive market for power management. However, we believe that, in revenue terms, desktop power management is probably a $25-30m-a-year market, with 1E the leader in terms of seats and revenue, followed by BigFix and Verdiem coming in second and third. Faronics is also in that leading pack, and may, in fact, have larger numbers of customers – albeit with smaller desktop estates.

All the leading suppliers are reporting buoyant sales, with 1E announcing some huge corporate contracts and BigFix closing some big public-sector deals. Faronics' growth is the fastest, but from a lower base. Its revenue in this area is in the low millions of (Canadian) dollars.

There will be new entrants – Altiris, the Symantec systems management division, for example, has recently improved its technology. Avocent's LANDesk may also step up its efforts in this area. Lakeside Software offers an intriguing timer-based alternative.

What about Microsoft? It is possible to carry out basic desktop power management functions using a combination of SCCM (system center configuration manager) and the operating system (especially Vista). These tools will become more capable over time, but, so far, there is no sign Microsoft will compete head to head with companies that it considers partners.

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