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Volume 17, Number 10 -- March 10, 2008

Tango/04 Looks Ahead to 2008 as It Attains Record Results in 2007

Published: March 10, 2008

by Timothy Prickett Morgan

Systems management software maker Tango/04 Computing Group, has spent a lot of time and energy moving beyond its Spanish home market and expanding its product line beyond systems management to broader security auditing and business service management, and that strategy has provided the Barcelona, Spain, company revenue growth and profits for the past several years. And according to Raúl Cristián Aguirre, president and chief executive officer at Tango/04, 2007 was a very good year, indeed.

Of course, Tango/04 is a privately held company--and one that has its share of private equity and other companies sniffing around for an acquisition in recent years as it talks up its sales growth--so it is not going to be terribly specific about its revenue figures. But Aguirre is happy to give the System i community a sense of how business is going.

In 2007, Tango/04 added more than 100 new customers worldwide, boosting its customer base by 7 percent to crest above 1,500 unique customers. The company's overall revenue growth was up 30 percent compared to 2006's levels, and sales outside of its Spanish home market rose by 17 percent. Sales in the Latin American sub-region continued to grow quickly, up 76 percent for the year. A few years ago, Tango/04 shifted to a mix of direct and channel sales and also broadened its product line to include security and business service monitoring and management as well as its traditional VISUAL system monitoring and management. The tools and their related services are all cross platform, but the company still has a strong focus on the System i space. (Aguirre says that all of its customers in the United States have an AS/400, iSeries, or System i server as well as lots of other iron they want to babysit.) Along with the product shift over the past few years, Tango/04 has moved from a selling technique that focused on peddling trial software and then closing sales, to one that sells a complete monitoring and management solution to customers. The company also has 35 reseller partners helping to push its products, as well as direct sales in Europe (from Spain), Latin America (from Argentina), and North America (from New Hampshire). In 2007, Aguirre estimates that about half of Tango/04's sales came from its direct sales force and the other half came from channel partners; about half of its sales came from Europe, with the rest coming mostly from North America and a smidgen of fast-growing business coming from the Asia/Pacific region.

Aguirre says that Tango/04 is growing not just because it is in more places--it has been in Latin America for more than 10 years and has only attained traction in the past few years--but because it has the right collection of tools at the right time. "The big four of systems management and monitoring do not really address business services," says Aguirre. "This is what makes us different, and this is where they have not done well. We can offer customers complete control of their business processes, which is a lot more valuable than monitoring a queue. We go into customers who have been trying to implement management frameworks for years and they are very frustrated. These days, such big projects that cost millions of dollars do not do well--that kind of project is not going to happen any more. We can offer more value--and do so more rapidly--to our customers."

This is why, Aguirre says, 10 of the top 20 banks in the world have implemented VISUAL management tools, and why those 100 new accounts came in and drove up sales in 2007. New accounts added this year include ING, Citigroup, Nike, Dole, Louis Vuitton Malletier, Costco, Bayer CropScience, Zurich Insurance, Standard Bank, Mapfre, Swiss Medical Group, Televisa, EDS, BBVA Prevision, Industrial Bank, Center Parcs, and Euronet. One of these new banking customers, by the way, is a mainframe shop that doesn't even have OS/400 or i5/OS servers--they just need a simpler way to manage and monitor their systems and applications.

Looking ahead into 2008, Aguirre is still optimistic about being able to keep sales humming along, despite the slowness in the economy in the United States and the recent cooling of the Spanish economy (that's his characterization of what is going on in Spain, not mine). "Everywhere I go, there is a fear that the situation in the U.S. will spill over," he says. "But I am not only confident that we can sustain our growth rate, but that we can surpass it. I get a lot of calls from private equity firms, and I have considered every proposal that comes across my desk. What I know is that Tango/04 has a lot of potential for growth."

And that means, for now, Aguirre is not planning on selling his company to anyone. But even he concedes that this can change.


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