Seeking Alpha: Will A Different Model Lead To Sustainably Different Results For SolarWinds?

Over the last decade or so, a host of software companies have tried to build successful businesses with models different than those used by industry giants including IBM (IBM), Oracle (ORCL), and Microsoft (MSFT). While Salesforce.com (CRM) and NetSuite (N) have gone the software-as-a-service (SaaS, or Cloud) route, others like Red Hat (RHT) have looked to maintenance and support instead of the software itself as the source of value.

That brings us to SolarWinds (SWI). There's nothing unusual per se about network management tools - companies like IBM and Hewlett-Packard (HPQ) have been selling them for years. What's different about SolarWinds is both the sales model (a low-touch model that relies on 3rd parties like search engines) and the product positioning (lagging tech, but cheap and easy to use). So far, the results have been impressive as SolarWinds has posted exceptional revenue growth and operating margins. As is so often the case, though, the question is whether the company can maintain this momentum and whether the Street is already ahead of the story.

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Will A Different Model Lead To Sustainably Different Results For SolarWinds?