Embarcadero Technologies, a database tools provider that recently branched out into data governance, is ditching that business model and going back to its roots, according to recently named CEO Wayne Williams.

“I believe that the company felt like it needed to go upstream, to have products with higher price points that involved longer sales cycles and presales support, and that's where we lost our focus,” he said.

The company, which was taken private last June, is best known DBArtisan, the database administration tool, which Williams conceded is better known as a brand than the company itself. That, along with data modeling tool ER/Studio, plus development tool Rapid SQL, account for 90% of sales. Williams emphasized that tools have been a highly sustainable business, with an installed base of 75,000 customers and a renewal rate exceeding 80%.

The key is that the company’s business was more geared to point rather than broader lifecycle tools. As such, the company was not accustomed to the long sales cycles and higher-touch presales support. In that sense, it was like Borland before it spun off CodeGear for its IDE business.

In so doing, the company is reversing steps taken after acquisition of data security tools provider SHC Ambeo Acquisition Corp. back in late 2005 which was supposed to position the company into a more lifecycle-oriented data governance market. The ill-fated strategy, branded “Strategic Data Management,” would add database auditing and activity monitoring services. Looking back, it proved a stretch for a company used to selling tools not services, and targeting practitioners, not C-level executives. “[These] products did not fit the model of this company,” said Williams.

Going forward, Williams said that R&D for core products has been doubled, while R&D costs have been reduced by 40% – undoubtedly, that last figure is attributable to pulling the plug on development of non-core products. Now under private ownership, the company plans spinoffs of products outside the core, and is considering SaaS and subscription models. “We are very serious about working this business.”

For a company going back to basics, Williams was an obvious choice given his background as CTO for the past 7 years. The company considers itself at an advantage to rival Quest Software, a much larger player that is still public and remains saddled with a highly diversified product portfolio. But of course there is the matter that Quest is a well-known name for management tools in Microsoft environments, however focused or defocused it is.

Private equity funding has become a more frequent phenomenon in the software business, and while it frees vendor CEOs of quarterly worries, private funds typically have more aggressive growth goals. In some cases, as with application lifecycle management provider Serena, the result is a new push into a SaaS-based enterprise mashup business that is targeting a new business user clientele outside its traditional developer customer base.

By contrast, Williams believes that Embarcadero can achieve its stretch goals by going back to its core customer base. “There is a lot of room within those user categories [database developers and administrators] to provide additional product to improve their productivity.”

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