Q&A (2): Q'deck CEO on channels and TCO

Continued from Part One

Will you sell electronically or still push retail?

We're about 60 per cent retail now, and I bet in five years we'll be about 60 per cent retail. Retail is still strong in so many ways, especially getting your product seen in the market.

In terms of cost though, there's nothing better than electronic downloads. Seven per cent of our revenue comes from downloaded software and I think that will rise sharply, but probably in place of direct marketing. A guy on the phone could sell by saying: 'Why don't you try this, all you have to do is push this button and try it for a month and if you like it, you pay.'

We move about 25,000 CleanSweep units a week. Only about one third of all downloads are successful. I've spoken to Symantec and they say the same. It's not our fault, it's just that the download time remains long for most people and the line goes down a lot. That's a particular problem where call costs are higher, as they are in Europe.

Where it has worked is the McAfee model where you sell to corporates and the communications infrastructure is usually a T1 line.

Total cost of ownership has been talked about for years - is it really hitting home with IT buyers now?

Yes. In the US, it's being compared to the medical care crisis in the 1980's when costs were rising so sharply that it was wiping out companies' bottom lines, particularly at Chrysler. It's going to be a long-term thing and it will be done on a multi-front basis but I believe TCO issues are going to force companies to look very closely at where they're spending money.

There has been a lot of discussion about Quarterdeck's future and around a year ago there was talk of a merger with McAfee. Do you see Quarterdeck staying solo or going to an acquisitive company like Symantec?

To be frank, if someone comes along and offers a huge amount of money, the board is bound to consider that.

Symantec had some successes with buyouts but then ran into the Delrina acquisition. They view that deal as being financially unsuccessful and now they feel burned. I have a problem making this run, but if someone comes along we'll talk to them, but it would cost them.