Pivot3 eyes service and software for growth
AUSTIN, Texas—Pivot3, a $31 million provider of storage appliances for video surveillance and virtual desktop infrastructure (VDI), plans to increase the percentage of its revenues that it derives from services to north of 25 percent, CEO Rich Bravman told Security Systems News.
The 10-year-old privately held company typically declines to discuss revenue figures, but in a recent Forbes article—where Pivot3 was named one of the magazine’s “most promising companies”—the company reported annual revenue of $31 million.
“We grew 80 percent year over year,” Bravman said. “We’re making advances on the top line, but we’re growing even faster toward profitability on the bottom line.”
The company grew while “managing down expenses last year,” he said. “We will be profitable later this year.”
Bravman, who joined Pivot3 as CEO 18 months ago, was previously with NCR, where he served as VP of corporate development and CMO. Before that he was chairman and CEO of Intelleflex. He was the fifth employee at Symbol Technologies and eventually served as its vice chairman and CEO.
Pivot3 should derive “25 to 30 percent or greater of its revenue from services,” Bravman said. Currently, service is not a significant revenue generator for Pivot3, but Bravman said that will change during the next several years.
“It’s imminently doable,” he said.
Bravman outlined the company’s plan: On top of the appliances it currently sells, Pivot3 will add a “service component [this year] and further downstream, a software stream.”
Its services push this year will include offers for “extra service during the warranty period, proactive health checks … and we think we can sell more after-warranty services,” Bravman explained.
“That will be the first example of creating more of a recurring revenue stream,” he said. Pivot3 also plans to add a “direct software-centric revenue stream” to its business model. The company will launch more software products that may be sold on a SaaS model, likely in 2014, he said.
It is also working on a new dealer program where it will “focus on the subset of [integrators and resellers] that are really willing to invest along with us.” Pivot3 executives will be able to discuss the basic framework of that program at ISC West.
In addition, Pivot3 is now “actively marketing” its VDI business segment to security systems integrators. Its VDI product can be applied to deliver security desktop solutions in a mobile environment, something that’s of growing interest to systems integrators, he said.
Bravman has managed the growth of other companies from the entrepreneurial stage to major enterprises, and he said he sees “the same ingredients [for growth] at Pivot3—great people, technology and intellectual property.”