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LANDESK and HEAT merger: what does it mean?

Posted By Barclay Rae, 23 January 2017

ITSM vendors LANDESK and HEAT Software recently announced their intention to merge. More specifically, LANDESK have joined forces with investment company Clearlake, who have owned HEAT since their acquisition of FrontRange in early 2015. The new combined business is to be called Ivanti – read the press release here.

The details are still being finalised but this is a big move in the ITSM world – both companies and their products have been mainstays in the ITSM world for over 20 years. HEAT is known for its eponymous helpdesk product, then the development of the ITSM suite under FrontRange, and the more recent rebrand as HEAT Software. LANDESK as ITSM vendors have come through several iterations – from Royal Blue and TouchPaper in the ‘90s and ‘00s, via Avocent to Salt Lake City based LANDESK.

Both vendors have operated at the high end of the IT Service Management market, with function-rich products and integration, also maintaining an extensive professional services capability for delivery. So there is much to ponder around what this will mean for their existing customers, new customers and of course the wider ITSM market. The stated approach initially, as revealed in the conversation below, will be to lead on new sales with the HEAT ITSM suite, possibly augmented by some LANDESK products. This should be a good deal for buyers, getting what is traditionally a high spec product at potentially a reduced price point. For existing customers of both vendors and products the short term outlook will involve little change – the stated approach is not to force migration on to either product but to move to a hybrid cloud solution over time. Obviously this will have some implications from the industry perspective in terms of jobs, as both vendors are major employers and have extensive sales, marketing and delivery operations, as well as development and administration.

We will need to see how this develops; however it may also be the first of several (probably long overdue) M&A activities in this market, which still remains overcrowded.     

In order to find out more about the implications of the merger for ITSMF members, I spoke with the new CEO of the consolidated company, Steve Daly.

BR       Steve – I guess you are busy at the moment but thanks for taking time to talk to us at ITSMF UK. Firstly what was the thinking and motivation behind this major announcement?

SD       Our goal with this move is to create a product set and approach that moves the delivery of IT more in line with the end-user experience – as opposed to a siloed technically-oriented focus. We and Clearlake/HEAT recognised the need to focus on endpoint management, reflecting the ever-changing technology experience of end users. To do that we needed a broad portfolio of products and a way to deliver the ‘best of the best’ ITSM technology. HEAT and LANDESK have complementary and innovative technologies, as well as great combined experience in delivering and integrating complex and top quality solutions to the enterprise market. So this is a great opportunity, with the two organisations coming together to provide some unique solutions for the market. For us ITSM is the underpinning and central element in the new integrated digital landscape – so we are offering choice and scale to our existing/customer bases, as well as new clients.

BR       What is the target market that you are now aiming to capture?

SD       We are definitely focussing on the IT and ITSM enterprise marketplaces, with a full portfolio of products that work well for operations, security, endpoint management and other areas of digital transformation. The merger allows us to compete in the larger enterprise market as a major player.

BR       What is the short-term position for current LANDESK and HEAT customers – will they need to migrate to one or other of these toolsets?

SD       No, for the next year or so we will keep customer implementations as they are. The longer term goal is not to combine products together, rather to move customers gently to a common Cloud platform, where we will build a combined product toolset using the best bits from both systems and existing platforms. So in the short term there is no change.

BR       So it’s not a big bang move, more of a transition to a shared new hybrid offering?

SD       Yes that is the approach. We recognise the value and investment of our current customers on both sides and don’t wish to disturb these.

BR       What will you offer to potential new customers?

SD       In due course we will start to offer the HEAT Cloud solution to new prospects, potentially using some of the innovative LANDESK Service Desk products as well.

BR       Both companies have large professional services operations – will these be retained?

SD       We see the need to meet expectations on delivery so professional services is key for us and we expect this to continue and even grow.

BR       LANDESK and HEAT both have significant ITSM development and operations in the UK – will these be maintained?

SD       In the UK our teams actually are sited very close together in Bracknell – this is a major hub for us and we plan to consolidate the offices into one in due course and maintain our UK ITSM presence.

BR       One final thing – HEAT is a high spec product, although pricing has been traditionally high in comparison to some competitors. Will the new joint approach mean some reduction in pricing?

SD       We recognise that there is a difference as well as a differentiator and will need to review the market price points; but yes, we will also need to be competitive in what is already a crowded market place.

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