Zingale is an existing Mercury Interactive board member who was recently announced as the new president. It is said he will more or less share the leadership role with Amnon Landan, the CEO of the business technology optimization vendor.
According to ComputerWire data, Mercury Interactive is currently the 34th largest software company in the world when ranked by latest available annual revenue. The fifth largest today is SunGard Data Systems Inc, with its annual sales for fiscal 2003 coming in at $2.95 billion. That is well ahead of Mercury Interactive’s latest annual sales of $506.5 million.
However, Mercury Interactive is growing rapidly. Its latest annual sales were up almost 30%, and if it keeps up that rate of growth it will have annual sales in the region of $1.4 billion by 2007, and $2.4 billion by 2009. That would take it into the top five going on their latest annual results, but only if that group’s sales stay around the same as they are today. But the current top five also saw strong growth in their latest annual results: Microsoft grew sales 14.4%, Oracle 7.2%, SAP 9.5%, Computer Associates 8.2%, and SunGard Data Systems 14%.
Consolidation could help move Mercury up another few places, of course. For example, if Oracle’s attempted takeover of PeopleSoft is successful, Mercury Interactive would move up the rankings by a place. But with the top five growing, Mercury would probably have to grow even faster to make it into the top five in its ambitious time frame. So what is Zingale’s strategy to achieve that growth?
My agenda is initially external, Zingale said in an interview with ComputerWire. I’m taking a global perspective, and looking at market opportunities and channel expansion. We think we can penetrate further into the market with our Business Technology Optimization Centers. Asked whether acquisitions would continue to play a role at Mercury – it spent about $225 million on IT governance vendor Kintana last year, and $49 million on the assets of Appilog in May this year – Zingale said: Acquisitions have got to be on the agenda for any high-growth company.
Zingale also said he is very aggressive and bullish on the concept of IT governance. I was on the board of Kintana as well as Mercury Interactive, and I am bullish on our abilities to provide customers with even more comprehensive solutions that enable CIOs to run IT like a business, he said.
Mercury’s appointment of Zingale to the president and COO role comes after nearly a year of the company being run without a COO. Zingale said CEO Amnon Landan needs more horsepower in management because the company is expanding rapidly.
In its latest quarter ended September 30, Mercury sales rose 31% to $165.4 million, and the company posted net income of $19 million, up from a loss last time of $6.7 million.
