Longtime NSI Software CEO Beeler Steps Down

And NSI Software, recognized by analysts as having a key position in the market for data-protection software, had just received another $7 million in Series C funding from private equity firm ABS Capital Partners to expand product development and its channels, bringing the total capital raised $60 million.

Yet Beeler, who co-founded the company 14 years ago, apparently won't be around to see the company through its next phase of growth, presuming all goes as the company plans. Beeler has quietly stepped down as chairman and CEO, though he says he will stay on for a few years as an adviser. The company's board named Dean Goodermote as his replacement. Goodermote is a seasoned executive who has taken public several companies that he has run and has merged other IT companies with other players.

Despite the fact that NSI has reported strong revenue growth, NSI wouldn't say whether it is profitable. Beeler is traveling abroad and has declined several requests for an interview, but in an e-mail forwarded by a company spokeswoman, Beeler said he has resigned for personal reasons, "and because it is the right time for NSI," he stated. "I have accomplished what I set out to accomplish with NSI and know that I am leaving the company in the strongest position possible."

Beeler also said he believes Goodermote, who has been an adviser to NSI's board for some time, is the right person to take NSI to its next phase of growth. "Dean has significant experience in leading companies through MandA processes, launching new product lines, making product acquisitions and accelerating growth strategies, in one case increasing revenue at triple-digit rates over a three-year period."

Nevertheless, the timing of Beeler's departure appears somewhat abrupt. Just days before leaving, Beeler talked to VARBusiness about his desire to grow NSI and even posed for a photo shoot. "I feel so comfortable," Beeler said in our interview last month. NSI was featured as a company that has a viable data-protection alternative to products by Veritas Software, among others, in a feature about emerging alternative vendors. The company asked that the photo be pulled, but the publication had already gone to press.

Double-Take is regarded as the leading software that performs continuous data protection and replication. Unlike backup software, continuous replication software mirrors systems while they are online. Beeler had said he was intent on not shifting into the broader backup market.

In an interview with VARBusiness, Goodermote said that the company has no intention of shifting strategy, but indicated he would like to see the company take a more aggressive growth plan during the next year. "I think as time goes on over the next six months to a year, and we start to look out further, hopefully we will have a broader perspective about the options available to us," he said. "I've been through IPOs, I've been through MandAs and acquiring businesses."

As CEO of Process Software, a developer of internetworking software, he grew revenues by 250 percent and expanded the company's product line by acquiring a product line from Cisco. After that company was sold, Goodermote co-founded IPworks, a company that was later sold to Ericsson.

Goodermote also was CEO of Clinsoft, an ISV that develops clinical research software and was losing money at the time he joined. Through repositioning of the product line, the company returned to profitability and later merged with Phase Forward. Goodermote also took PSDI, now known as MRO Software, through an IPO and secondary offering.

Saying that an IPO for NSI Software is not "out of the purview," he did say it was not on the table currently. He insisted that he believes that he was not brought in to fix a company in trouble, but that it needs to grow faster. "I couldn't say we'd be into something specifically different, but I would hope we could seek complementary markets we could move into," Goodermote says.

Some areas he finds appealing are expanding into the area of compliance and developing appliances. "I have been through situations where I've fundamentally changed the course of the company," Goodermote said.

One NSI partner saw the change as a positive sign that the company will grow, but didn't see it as a sign that there was any specific trouble and was encouraged by the selection of Goodermote. "It seems like he's definitely got some seasoning behind him and he's fairly capable," says Shyam Manwani, a principle with S&L International. "You can see them grow to the point where they get acquired by someone larger trying to get into that space, or you could see them growing to be a stronger entity in that space overall."