Securing a successful company
In late April, Pilot Network Services, a publicly traded security outsourcing company in Alameda, Calif., abruptly closed its doors. The swiftness of the shutdown caused one customer to send members of its own staff to Pilot's data center to keep its servers and secure connections running.
Analysts say Pilot's closure probably resulted from a poor execution of its business plan and the company's inability to effectively differentiate its offering from those of newer players in the managed security services market.
"If you want to say something was broken, it wasn't the market demand, it was the business execution," says Eric Hemmendinger, an analyst at Aberdeen Group.
Pilot's basic offering was a soup-to-nuts portfolio of services, an expensive alternative when other companies were willing to segment their offerings to fit customer needs, according to Hemmendinger.
The expense of running its own data centers also caught up with the company.
What finally did Pilot in, he says, was its inability to find secondary sources of cash from venture capitalists, in a secondary public offering, or by taking the company private.
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Caisse is a freelance writer living in Massachusetts. She can be reached at Kcaisse@gis.net.
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