LANDMARK HITS WINNING STREAK.

At the start of this year, Landmark Systems Inc had all the hallmarks of a legacy software company. Its performance management software business was almost entirely dependent on mainframe sales; two-thirds of its revenues were coming from the maintenance of installed products; and its growth of new license sales was stagnant. But by mid-1998, Vienna, Virginia-based Landmark had hit something of a winning streak. Fueled by ever- growing customer confidence in mainframe technologies, and by strong demand for software for adding performance consistency to client/server networks, Landmark has seen its license revenue growth in 1998 soar to about 70%. "We are seeing close to 50% growth in mainframe license revenues and over 100% in client/server sales," says Landmark CEO Kathy Clark. That has brought the split of new software sales to maintenance close to 50/50, and pushed client/server software sales, by far the fastest growing part of its business, to about 15% of total revenues. Landmark had been betting on those trends for some time. During 1997, the year it went public on Wall Street, it raised R&D investment levels to an astonishing 38% of revenues. Its concentration was on crafting versions of its PerformanceWorks application performance management product for large-scale Unix and NT environments. Consultants often highlight how organizations are struggling to run enterprise-wide client/server networks. That has created demand for products such as the Monitor from Landmark, which helps companies plan the utilization of systems and applications to minimize performance problems. The company's new-found buoyancy has come after a few false starts: "The early client/server products from everyone fell far short of market expectations," says Clark. "Now we are at the point where the combination of product improvements and the maturing of the client/server market has resulted in a very fast growth track." Not that Landmark has this market all to itself. Even with revenues for 1998 likely to come in at around $52m, up 20% on last year, Landmark is facing some formidable competition. Its chief foe, BMC Software, is more than 14 times larger and has strengthened its hand with the acquisition earlier this year of performance software specialist BGS Systems - a company roughly the same size as Landmark that was valued by BMC at $285m. With $20m in the bank, though, Clark is more focused on acquisitions than on being acquired - at least at this stage.