QUOTE AND NEWS
StreetInsider.com  Jun 16  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Double-Take+%28DBTK%29+Shares+Head+Lower+as+Shareholder+Sues+Over+Inadequate+%24242M+Bid+by+Vision+Solutions/5736381.html for the full story.
Globe Newswire  May 18  Comment 
NEW YORK, May 18, 2010 (GLOBE NEWSWIRE) -- Levi & Korsinsky is investigating the Board of Directors of Double-Take Software, Inc. ("Double-Take Software" or the "Company") (Nasdaq:DBTK) for possible breaches of fiduciary duty and other violations of
Globe Newswire  May 18  Comment 
DALLAS, May 18, 2010 (GLOBE NEWSWIRE) -- MicroStockProfit.com announces an investment report featuring Double-Take Software Inc. (Nasdaq:DBTK). The report includes financial, comparative and investment analyses, and industry information you need to
Reuters  May 17  Comment 
Business software maker Double-Take Software Inc said it agreed to be acquired by private equity firm Thoma Bravo LLC for about $242 million in cash.
TechCrunch  May 17  Comment 
Vision Solutions, a portfolio company of PE firm Thoma Bravo, has agreed to acquire Southborough, Massachusetts-based Double-Take Software, a provider of backup and recovery solutions. Under the terms of the agreement, Double-Take stockholders...
newratings.com  May 6  Comment 
NEW YORK, May 5 (newratings.com) - Analysts at MKM Partners downgrade [more]
StreetInsider.com  May 4  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Double-Take+Software+%28DBTK%29+Posts+Q1+Loss+of+%240.01%2C+Misses+Views/5593790.html for the full story.
New York Times  Apr 13  Comment 
The data recovery industry received a bit of a jolt this week when Double-Take Software disclosed that an unidentified suitor had made an unsolicited offer to buy it for a premium price.
Reuters  Apr 12  Comment 
Business software maker Double-Take Software Inc said it received unsolicited buyout offers at a premium, sending its shares up 14 percent.
StreetInsider.com  Apr 12  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Guidance/Double-Take+Software+%28DBTK%29+Cuts+Q1+EPSSales+Guidance%3B+Has+Received+Indications+of+Interest+at+Prices+Above+Recent+Trading+Range/5519730.html for the full story.




RELATED WIKI ARTICLES
 
TOP CONTRIBUTORS


Double-Take Software (NDAQ:DBTK) develops software that protects people's data from disasters. It uses off-site servers to back up data 24 hours a day, protecting businesses from an emergency loss of information. As of December 31, 2007, Double-Take has sold and licensed its products to over 15,000 users. Double-Take's services mesh well with the Windows operating system, adding to its appeal to businesses which use this OS - but in the long term, Double-Take's business model is at risk if Microsoft decided to embed better data-recovery services into its operating systems.

Double-Take's clients include major corporations like Morgan Stanley (MS) and 250 of the Fortune 500 as well as the Pentagon and other government organizations. The company makes 30% of its money from 2 companies, Dell and Sunbelt Software Distribution, who bundle Double-Take products with their products and sell the software directly. [1] 18% of the Company's sales come from Dell, and 12% come from Sunbelt. [2] Double-Take reported over $23 million in revenue during 2007, and has 354 employees.[3]

Business Overview

Customers

As of December 31, 2007 Double-Take had over 15,000 customers.[4] Customers can use the software to simultaneously protect anywhere from two to several hundred servers. Double-Take has various notable customers including

Double-Take does its business around the world.
Double-Take does its business around the world.[5]
  • Bank of Montreal
  • The Boston Celtics
  • Brattleboro Memorial Hospital
  • Hatch Mott MacDonald
  • Hershey Entertainment & Resort Company
  • infoUSA
  • McGuire Woods LLP
  • MidAmerica Bank
  • Morgan Stanley
  • Shorenstein Realty Services L.P.
  • Suffolk University
  • The E.W. Scripps Company
  • The Pentagon
  • The United States Security and Exchange Commission
  • The United States Department of Defense
  • The United States Department of State
  • Half of all Fortune 500 companies
  • 19 of 25 of the United States' largest law firms
  • Over 1,000 Financial institutions
  • Over 1,100 hospitals and healthcare service providers
  • Over 1,000 school districts and educational institutions [6]

Besides its many customers in the United States, Double-Take does much of its business abroad. The chart to the right shows the location of the Double-Take's revenues.

Financials

Double-Take's only became profitable in recent years.
Double-Take's only became profitable in recent years.[7]

Double-Take saves its clients from data-loss by selling them software, and by helping customers use the software solutions. Its revenues come from Software, Maintenance, and Professional Fees described in the Segment Information section.

The graph to the right shows that Double-Take has become exponentially more profitable in the past few years as it has started to serve major institutional clients.

Business Segments

Software (59% of 2007 Sales)

Double-Take received approximately 59% of its revenue from licensing its software in 2007, and 63% in 2006.[8] A software license allows a Double-Take customer to use the product indefinitely. At a surface level, this business model may appear unsustainable, but as companies expand, buy new systems, and change their networking protocols, they may opt to buy new Double-Take Software. They also pay Double-Take to maintain and update already purchased software. Software license purchases tend to be seasonal, with many organizations making their information technology purchases in the second half of the year.

Double-Take sells its software through several different channels
Double-Take sells its software through several different channels[9]

Selling software has fairly high margins. That is to say, expenses represent a very small part of the $5000 of revenue each unit provides. Cost of software revenue includes media, manual, distribution costs, as well as royalties to developers of software Double-Take uses in its programs. Also, Double-Take must pay its sales team, and incur other marketing expenses to actually promote its product. The company plans to hire a larger sales force to more aggressively promote its software.

Double-Take offers a wide variety of software products that include:

  • Double-Take for Windows or Linux- real time, centralized back-up for virtual and physical servers
  • Double-Take for Virtualization- Protects server wide applications and replicates the entire virtual server in real time for instant recovery in case of failure
  • Double-Take for SBS Solutions- Like above but low bandwidth requirements, and works from virtually any location
  • Livewire- An inexpensive and easily implemented solution to data loss, because it does not require the existence of an external server to protect the system.[10]
  • TimeData- Makes it easy to go back to previous editions of Microsoft Excel spreadsheets, or SQL databases
  • netBoot- A less intensive option that helps manage re-booting images, so that failed computers can be easily restored
  • sanFly- Makes backing up multiple servers more efficient by putting them all on a single image.
  • GeoCluster- enhances Microsoft Cluster technology to help protect your data across regions.[11]

As the image above suggests, Double-Take is very reliant on its distributors to sell its products to the final consumer. If, for instance, Dell stopped producing as many computers, Double-Take would lose business because Dell pays Double-Take to use its software on its computers.

Maintenance (35% of 2007 Sales) and Professional Services (6% of 2007 Sales)

Once the company sells its software, it charges maintenance fees for updates and support. Usually, purchasing a software license entitles a company to a year of free support before Double-Take starts charging. Additionally, companies pay Double-Take for Professional Services which include software installation, creation of specialized emergency recovery plans, and training of company employees to use the software.

Maintenance fees comprised about 35% of Double-Take's revenue in 2007 and 32% in 2006. Professional Services generated 6% in 2007 and 5% in 2006.[12]

DoubleTake's Maintenance and Professional Services are more costly to implement than their software sales, and include salary and training costs, travel expenses, and basic overhead. As Double-Take begins to send less software out, and sends more people out to fix its existing software, the company anticipates a decline in its profitability. [13]

Trends and Forces

An Ever Growing Market

The demand for business data continuity products is fairly inelastic. Data protection is not an expense that can be easily cut from a company once the company starts basing its entire operation on a digital mainframe. A survey of data continuity companies conducted by Continuity Central verifies this conclusion. 63% of respondents forecast that 2009 spending on continuity products will stay level or increase from 2008.[14]

The managed security services market has been growing steadily as more and more companies realize how efficient computerization can be. Further efficiency can be found in the use of virtual mainframes, and multi-regional servers. The US managed security services market was valued at approximately $1.3 billion in 2007, an increase of 19.6 percent over 2006. The IDC predicts it to grow to $2.8 billion by 2012.[15] Thus, Double-Take is operating in a growing market and stands to benefit from higher demand in the long run.[16]

A larger market for an inelastic service will of course only benefit Double-Take insofar as it can maintain its market share and continue offering good products.

Growing Awareness of Disasters

Due to events like the devastating Indonesian Tsunami, Hurricane Katrina, and September 11th, businesses have become more aware of terrorism and natural disasters. Unforeseeable and uncontrollable circumstances encourage businesses to back up their data in real time. [17] This trend will benefit Double-Take's business, which thrives on risk-aversion.

Federal Business Regulations

Because businesses could potentially cite data loss to cover illegal behavior, The Health Insurance Portability and Accountability Act of 1996 and the Sarbanes-Oxley Act of 2002 require data protection and recovery. [18]The banking crisis has only increased the Government's mandate to oversee questionable business practices. Under the current laws, companies can no longer cite "server failure" to hide illicit action. Double-Take benefits from the current regulatory environment because its software helps major corporations comply with accounting regulations, because companies must continually back-up their servers to ensure transparency.

Global Modernization

Especially with its recent expansion into Dubai [19], Double-Take stands to benefit from the world's modernization. As a growing number of African, Middle Eastern, and Asian businesses become fully digital, Double-Take will have the distribution networks to provide them with data recovery solutions.

The Success and Mercy of Microsoft

Microsoft officially endorses Double-Take products because of their high compatibility with Windows. Microsoft also used to endorse Netscape, until it developed Internet Explorer to replace it. Microsoft has developed a low-level data protection product, but as of yet has not interfered with Double-Take's core business of providing continuous data protection for mid to large businesses. If this changes in the future, Double-Take would lose its entire competitive advantage. Other software companies would no longer have a pressing desire to bundle Double-Take software with their products if Windows offered a more reliable and integrated internal solution to continuous data recovery.

Furthermore, Double-Take software is specifically written to efficiently interface with Windows. If Windows were to lose its market share in the operating system market, then Double-Take's business would be hurt badly.

Competitors

Microsoft (MSFT), while heavily endorsing Double-Take products, has released something called the 'Data Protection Manager' which competes with Double-Take's most simple data protection software. It aids basic data retrieval processes like tape-backup and local server back-up. [20] Symantec (SYMC) also offers data protection, but is more expensive and not as heavily endorsed by Windows and major corporate clients. EMC (EMC) and CA (CA) also offers data protection services. Finally, International Business Machines (IBM) has entered the data-emergency business with its purchase of Softek.

It is useful to note that none of Double-Take's major publicly traded competitors have data-recovery and protection as their core business, instead bundling the service with other products. Thus, Double-Take only competes in part with its competitors with the exception of the smaller private firm, Neverfail.

Double Take operates specifically in the market of Data Continuity with a specialization in Microsoft Windows. It therefore identifies its four main competitors as EMC, Symantec, CA and Neverfail.

Despite the fact that Double-Take is dwarfed in market capitalization by EMC, Symantec (SYMC) , and CA (CA), it delivers its product competitively as evidenced by its high profitability shown in the graph below.

Double-Take's small size keeps it profitable, but exposes it to the risk inherent in competing with multi-billion dollar software behemoths.
Double-Take's small size keeps it profitable, but exposes it to the risk inherent in competing with multi-billion dollar software behemoths. [21]


Alternatives to Double-Take's Products

Backing up data does not require Double-Take or any other company. Smaller businesses could easily deploy the following options to protect their data cheaply.[22]

First, Double-Take competes with more simplistic Tape Backup, which entails nightly or weekly backing up of data. Major products here include Symantec NetBackup and Backup Exec, IBM Tivoli Storage Manager, CA Brightstor Enterprise Backup, Legato Networker and CommVault Galaxy.

Secondly, when the primary drive does not completely fail, it is possible to take a Snapshot of a drive to make its recovery easier. Double Take offers continuous recovery, so no snap shots are necessary. Nonetheless, a combination of tape backups and snapshots works for most non-business users. Examples of Snapshot products include Microsoft Volume Shadow Copy Service, EMC TimeFinder and Snapview.

Third, companies can cluster, or use multiple interconnected servers to back-up data. This is very expensive and only works on-site. Double-Take offers products that make clustering more efficient, and improve its range. Some pure clustering products include Microsoft Cluster Service, Symantec Cluster Server, Steeleye LifeKeeper and Legato AutoStart.

Companies can also use complex disk mirroring and continuous data protection systems to protect their servers. Doubletake provides these services at a discount.


References

  1. Double-Take Website
  2. Reuters
  3. DBTK 10-k Pg. 83
  4. DBTK 10-k Pg. 8
  5. DBTK 10-k Pg. 83
  6. DBTK 10-k Pg. 8
  7. DBTK 10-k Pg. 83
  8. DBTK 10-k Pg. 34
  9. DBTK 10-k Pg. 34
  10. Double-Take Livewire Analysis
  11. Double Take Website
  12. DBTK 10-k Pg. 30
  13. DBTK 10-k Pg. 30
  14. Business Continuity Survey
  15. The Growing Managed Security Services Market
  16. The Growing Managed Security Services Market
  17. Growing Fear of Uncertain Occurences Benefit Data Continuity Business
  18. DBTK 10-k Pg. 13
  19. AME Info: Double-Take Goes to Dubai
  20. Data Protection Manager
  21. [1]
  22. EMC 10-k pg.22
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki