How to Build a Profitable IT Company: Three Questions with Laplink CEO Thomas Koll
It’s a dirty job, but someone’s got to do it. I’m talking about migrating people’s files and programs from their old computer to their new computer. Sure, IT guys do this for employees all the time, but who knew you could build a profitable and sustainable business around it?
Meet Laplink, a Bellevue, WA-based company that was founded in 1983. Back then it was DOS instead of Windows 7, of course, but the basic idea is the same. If you get a new PC, you want to transfer your files, settings, and applications from your old machine to the new one. But if a company does this manually, it can cost hundreds of dollars and several hours of labor per machine. Laplink says its flagship software, called PCmover, can do the same thing across a whole company or organization much more cheaply and efficiently—and it works across different PC brands (like Dell, Toshiba, and HP) and different operating systems.
Its big customers include EMC, IBM, FedEx, Lockheed Martin, Lucent Technologies, Pfizer, SAIC, Xerox, and numerous universities and government organizations. So although there is plenty of competition in this part of the IT-management sector, the company seems to be doing something right.
“Last year Laplink really emerged as the world market leader in PC-PC migration,” says CEO and chairman Thomas Koll. He notes that the firm also makes business software for things like erasing hard disks safely and syncing files between PCs and Macs. Koll joined Laplink in 2003. Previously he was the CEO and chairman of Burnaby, BC-based Infowave, and before that, vice president of Microsoft’s network solutions group, where he managed the company’s business with telecommunications firms.
I recently asked Koll (see photo, left) a few questions about running a company that’s not the flashiest around, but is making money by solving real business problems, unlike a lot of firms, especially newcomers. Here’s a sampling of what he had to say:
Xconomy: Is there something unique about Laplink’s strategy?
Thomas Koll: Yes and no. Yes, we are unique, because we are building a franchise around PC migration, where we claim not only worldwide leadership, product innovation and thought leadership. We are also unique because we are growing and building our business without help from venture capital firms. This might curb the growth rates, but it creates an independent strategy that is geared to long-term profitability and not the quick exit. With our expertise and a highly experienced employee base, we are unique in that we can react to market needs in a very quick way. Where it might take other companies much longer to create a new product and take it to market, Laplink is able to do this quickly—satisfying the needs and wants that ebb and flow in today’s market.
One example of this was a strategic decision to include an “Upgrade Assistant” feature in PCmover in conjunction with the release of Windows 7. This allowed customers with Windows XP computers to easily perform an in-place upgrade from XP to Windows 7— even though this scenario is not supported by Microsoft. Since then, customers have purchased many copies and PCmover has received numerous favorable reviews and endorsements from the press.
And no, we are not unique in many ways. Business goals are to create profitability, serve the customers as best we can, maintain employee satisfaction and have high integrity and morals. Most companies of our size don’t just chase the Internet bubble, the wireless nirvana or the ultimate adaption in social networking. Most follow business principles to create sustainable business. So are we.
X: What kinds of lessons does Laplink hold for IT companies?
TK: After 27 years in business we have certainly shown continuity and customer focus. We have always concentrated on current customer needs. In retrospect we have—unlike the first 10 years where everything was cutting edge—not concentrated on the “cool stuff” of future technologies, but what gaps exist with PC usage and filling those gaps with easy-to-use product.
Our motto has always been “to make the everyday life of the PC user easier,” and customers could always turn to us to find useful “utilities.” By doing that we created a worldwide brand and products of high recognition.
Not sure if it is a lesson, but certainly we proved that “small and focused” can create a sustainable business.
X: So how are things looking in terms of growth and profitability?
TK: Over the years Laplink has had good times and challenging times. In recent years Laplink restructured its product focus, renewed the product line and has regained profitability. 2009 was a challenge, but 2010 shows healthy growth rates.
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