Magic Solutions

Magic Solutions International, Inc. (known as Magic Solutions) was a company that specialized in help desk automation and asset management software. Based in the East Coast of the United States, the company emerged as an unplanned spin-off from a computer systems integrator, and was later considered one of the East Coast's most successful independent software vendors of the 1990s. Magic Solutions was founded in 1988¹ by Igal Lichtman and was headquartered in Paramus, New Jersey, U.S. At inception, the company consisted of a single programmer in the service of one customer. Magic Solutions eventually accommodated over 300 staff members and a customer base of 6,000. The company reached a yearly revenue sum of US$64 million and in 1998 was sold to Network Associates, Inc. (now known as McAfee) for US$110 million in cash.

Magic Solutions International, Inc. (known as Magic Solutions) was a company that specialized in help desk automation and asset management software. Based in the East Coast of the United States, the company emerged as an unplanned spin-off from a computer systems integrator, and was later considered one of the East Coast's most successful independent software vendors of the 1990s. Magic Solutions was founded in 1988 by Igal Lichtman and was headquartered in Paramus, New Jersey, U.S. At inception, the company consisted of a single programmer in the service of one customer. Magic Solutions eventually accommodated over 300 staff members and a customer base of 6,000. The company reached a yearly revenue sum of US$64 million and in 1998 was sold to Network Associates, Inc. (now known as McAfee) for US$110 million in cash.

Early history

MicroAge, of Mahwah, New Jersey, was a retail computer franchise in the 1980s that achieved a considerable level of success. It transitioned from a retailer of stand-alone computers into a value added reseller and offered LAN installations for local businesses. A significant problem faced by the company after formation was the management of equipment that was sold and returned for service. At the time, a PC-based tracking program that could monitor serial numbers, warranty entitlement and a complete service history did not exist. Igal Lichtman, president of MicroAge, and one of the three owners, designed a "workflow" for a service management program that enabled staff to effectively run the company's service department. Employing the "C" programming language, and working together with former colleagues and friends from the Israel Defense Forces, Lichtman created the application, "ServiceMagic". Shortly after the creation of ServiceMagic, one of MicroAge's largest clients, a "Fortune 500" company based in Westchester County, New York, U.S., was discarding its mainframe computer and consequently required a help desk application that was compatible with a PC network. Lichtman worked with the client's Information technology (IT) department to modify ServiceMagic and designed a new product, "SupportMagic". The client installed the fledgling Btrieve-based software and successfully transitioned from a Computer Associates mainframe-based Netman. Following a magazine article on the development of SupportMagic, Lichtman received over one hundred telephone inquires for the software product, an increase in demand that led to the inception of Magic Solutions.

International expansion

While Pallatta focused on domestic sales, Magic Solutions' international sales were bolstered by its VP in the international arena Barbara Johnson who continued the company's expansion with European, Asian and Latin American distributors. By late-1997, these international accounts represented almost forty percent of Magic Solutions' sales. The company's overseas expansion included a key acquisition in 1996 of SupportMagic Benelux—managed by Cornelis Mudde and Guido Vervelde—Magic Solutions' largest distributor at the time. In late 1996, Magic Solutions released the Kanji version of SupportMagic, a product that was distributed in Japan by Transcosmos. During the course of its growth, Magic Solutions avoided venture capital and retained its original management team.

IPO

By 1996, Magic Solutions was competing in a marketplace that was beginning to consolidate. The company faced competitors that were bundling help desk software with their other products, as McAfee did with its anti-virus product, and management was considering either an initial public offering (IPO) or venture capital to fuel further growth. Until this point in time Lichtman had maintained Magic Solutions' independence as a company, but he was forced to make choices about the company's future from a limited set of options. By 1997 Wall Street brokers were actively pursuing Magic Solutions for a public offering and Lichtman then employed the services of a well-known pre-IPO executive to preside over the preparation process. By this stage, Network Associates, Inc. (NYSE:NETA, now McAfee) had entered the help desk market through the 1995 acquisition of two small companies, Vycor and PHD Help Desk. Unsuccessful in its challenge against the two market leaders Magic Solutions and Remedy, Network Associates entered into acquisition discussions with Magic Solutions.

Acquisition

On March 25, 1998 Network Associates announced its plan to close a transaction whereby it would acquire Magic Solutions for approximately US$90 million for the purchase of in-process research and development. Network Associates then sold Magic Solutions' assets to BMC Software (NYSE:BMC) on December 15, 2003 for an approximate cash sum of US$47 million; the official date of the acquisition was February 2, 2004.

References

Text derived from https://en.wikipedia.org/w/index.php?oldid=1376326602 under CC BY-SA 4.0; modifications have been made.