AppSense set to grow US operation in preparation for IPO

Five months since Goldman Sachs took a reported 28% stake in UK desktop virtualization specialist AppSense, the signs are that it is starting to expand its US presence by hiring a new Silicon Valley design team that will be based in the company’s Santa Clara offices.
AppSense has seen exceptional growth over the last 18 months as more IT organizations are recognizing the value of user persona management (User Virtualization in AppSense terminology) as part of a comprehensive end user experience management capability. AppSense’s turnover has increased from $29m t0 $46m in 2010 with pre-tax profits increasing from $2.5m to $6.1m. At the same time building on its long standing relationship with Citrix it has established strong partnerships with major services companies. In May AppSense announced that it had been elevated to a Managed Independent Software Vendor (ISV) Partner status by Microsoft Corp. The company was previously a High Potential Partner since 2009. Less than five percent of Microsoft ISV partners achieve Managed ISV Partner status, a category reserved for high-growth companies with significant joint revenue potential.  Most recently AppSense announced that HP has selected AppSense User Virtualization as a core component of HP’s new Client Virtualization Reference Architecture..

Darron Antill, who replaced company founder Charles Sharland as CEO at the start of the year, said when the Goldman Sachs deal was announced that AppSense would use the proceeds from Goldman’s investment to accelerate its expansion into the US, which is now responsible for over 50% of the company’s business. Sharland who remains on board as Executive Chairman has indicated that AppSense’s goal is to become a £1bn company through an IPO in 3- years time.

Expanding its design team is a major step along towards this goal, but even accepting Goldman Sachs’ view that desktop virtualization will be worth $3bn over the coming five years, it is difficult to see how AppSense will achieve this goal without extending its services beyond the Windows desktop. One clue, as to what this future direction might be lies with the title of part of the view Silcon Valley operation –  “The cloud and mobile research center”.  I’ve spoken to AppSense quite a few times this year about the need to embrace both cloud and mobile technologies and have suggested to them in the past that they consider either a partnership or out right by of mobile communications start-up, Bitzer Mobile, as a way to jump-start their mobile aspirations.  I’m not suggesting that AppSense has any plans in this direction; a partnership with Bitzer would be a way to hit the ground running, but may not be central to the direction that AppSense might want to take. Regardless of this, the prospect of extending AppSense User Virtualization to cloud and mobile platforms would open up a very significant new opportunity for AppSense where there are no clear dominant players to compete with.

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