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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | FEBRUARY 21, 2001 MOVERS & SHAKERS By Jeanette Brown A Daredevil Races into New Net Territory Totality CEO Darl Davidson is facing off against Netscape legend Marc Andreessen in managed services for complex sites
Davidson loves tooling up the California coast on his Harley-Davidson, holds a black belt in karate, and is happiest in the cockpit of a twin-engine Cessna, moving 280 miles per hour 75 feet above the ground, trying to outdistance eight other planes. "In air racing, you have to do it fast, and you have to do it right," says Davidson, CEO of Totality, an 18-month-old startup that monitors Web-site performance and security for e-commerce companies. "Fast, or you lose. Right, or you die. In business, it's the same." That bravado earned 46-year-old Davidson the attention of the founding members of Totality, who liked his attitude -- in business, at least -- and asked him to run their company. "In the Internet world, young people come up with the ideas, and older people make them matter," says Michael Carrier, Totality's 35-year-old founder and now its chief technical officer. HARD DECISION. Last June, Davidson accepted the offer and signed on as CEO. Since college, Davidson had worked for Electronic Data Systems, mostly in sales to large accounts. "The decision to leave a 23-year career at EDS was not an easy one," he says. It might not have been easy, but he made it at air-racing speed. Two hours after Totality offered him the job, Davidson decided to take it. At EDS, he had seen many clients with large, complex sites suffer breakdowns that would have been eased if a company like Totality had been on the case. And he jumped at the chance to build something from the ground up. "I immediately saw Totality as a company focused on solving a critical need," Davidson says. Perhaps, but Davidson's move is far from risk-free. By leaving EDS, the $19 billion granddaddy of technology outsourcing, he's betting big on a new breed of service company, one that focuses specifically on the Internet. Managed-services companies such as Totality, Sunnyvale (Calif.)'s Loudcloud, and San Mateo's LogicTier Inc. don't follow the traditional outsourcing model of simply acting as a company's virtual IT division. Instead, they automate the deployment of complex Internet sites, making it a faster and less people-intensive job. While analysts are sold on the idea and its cost savings, there are far too many upstarts -- none of them profitable -- angling for a piece of this new territory. "Most of the [managed-services] companies we see today won't survive," says Corey Ferengul, an analyst with researcher META Group Inc. "HUGE CHALLENGE." Totality has some advantages. The company came out ahead of 17 other Web-site management companies in a recent META Group survey. And because it doesn't actually build data centers to host customers' sites, it enjoys a lower cost structure than competitors such as Loudcloud, Ferengul says. Still, Loudcloud, piloted by Internet top gun Marc Andreessen, remains the player to beat. Although the 29-year-old co-founder of Netscape has big plans for Loudcloud, Davidson claims to be unruffled by the competition. With two decades of management experience under his belt, Davidson believes he'll do better at shaping an enterprise as complex as he expects Totality to be. "Andreessen is very bright," he says. "But running a large company is a huge challenge requiring teamwork." Davidson isn't alone in believing his experience will play to Totality's advantage. "If I was a movie producer making a movie about Internet companies, I would want Davidson cast as CEO. He brings experience to the young tech cowboys, many of whom need corralling," says Brian Sugar, chief Web officer at Kmart's BlueLight.com, one of Totality's dozen customers. BlueLight became a Totality customer the week Davidson signed on, choosing that company over Loudcloud, says Sugar. And Azure Capital Partners, which invested $15 million in Totality last June, was "particularly impressed with Darl's background and ability to work with large corporations," says Azure founding partner Cameron Lester. One of Davidson's early steps as CEO was to change the company's name from the nebulous MimEcom to Totality, which he believes "more accurately reflects what we are all about -- one point of contact, one total solution." He hopes the name change and a marketing push will help him sign up more big names like BlueLight. He aims to increase his client roster tenfold, to more than 100 this year, and expects revenues in "the tens of millions." CHILLY CLIMATE. Clients today pay Totality between $25,000 and $250,000 per month. Davidson expects the company to be cash-flow-positive by early next year but wouldn't release figures for sales or losses. Since its founding in September, 1999, Totality has grown from a handful of employees to 250 staffers. To date, it has raised $122 million from Azure, Baker Capital, Credit Suisse First Boston, and others, "enough to turn the corner and be profitable," Lester says. Given the current chilly climate for Net stocks, Davidson says he has no specific plans for an IPO. But even steering a company such as Totality toward profitability today should be at least as exciting as flying 75 feet above the ground with dozens of rivals in hot pursuit.  Brown covers e-business for BusinessWeek in New York  | | |
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