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Date: August 7, 1996

Title: Interview/ Igal Lichtman on the new recognition of the Help Desk software industry

Subject: MagicSolutions of Paramus was the 1995 Top 40 Company of the Year for Northern New Jersey. Russian-born Igal Lichtman, the company”s CEO, has built a successful business by knowing how to turn problems into opportunities. MagicSolutions specializes in Help Desk software for organizations-including the White House-that need to solve computer troubles quickly. Company sales increased from $300,000 in 1989 to $11.1 million in 1994.

BUSINESS: Last year you expected revenues of $20 million for the year-end. Have you achieved that goal?

Lichtman: Our rate has already been higher than that. Last month we had the best month ever, which was about $2.2 million. Our fiscal year actually goes through May. The rate we are on right now for 1996 is between $25 and $30 million.

BUSINESS: Have there been any changes during the year that have fed MagicSolutions” continued growth?

Lichtman: The market is finally recognizing Help Desk software as a separate industry. The industry has grown up, and it has stabilized in the past two to three months. Almost every week there is something written about the Help Desk industry. The complexity of the technology is increasing, and there has to be some way to help people understand this technology. If you look at a recent Investor”s Daily, our competitors, many of whom are now public, are listed as Help Desk software companies with a customer-support emphasis. Prior to that, we were listed with vertical market software and a variety of different software companies. The performance of our competitors on the stock exchange, which is well above what Wall Street expected, is proving that our industry is something worthwhile in which to invest. Some companies are growing 100% from year to year.

BUSINESS: How does MagicSolutions fit into this explosive Help Desk software arena?

Lichtman: We are a market-created company. We didn”t plan to be in this industry. We started out as software designers. But then the market began to make demands on us as to what else it needed, and this company, as it exists today, was slowly created. We listened to the market. Now we have 2,900 installation sites in places as varied as law firms and the White House. We have gotten there by listening to what people say and giving them what they want. We have now started thinking ahead of the market rather than only reacting to it. Most of our competitors are jumping from field to field. Everything is itching and hot. They want to do it here. They want to do it there. We are staying in a specific market. Our niche is internal Help Desk software for a departmental market. We are not looking to be very diversified and to be everything to everybody. We are looking to be in a slice of this market-one that is very big by itself. One big slice of our market that nobody is addressing is people like us, software developers. New Jersey is full of software developers. There is no specific Help Desk program for software development companies. We are working to fill that need. It”s still Help Desk, but it”s just an additional flavor of Help Desk.

BUSINESS: Have you changed the organization of your company?

Lichtman: We, as a company, have matured. We”ve hired new management people with experience in the field. For example, we brought a CFO on board. We are building up our infrastructure. Each month we are adding a half a dozen to a dozen employees. We now have 140 employees, whereas a year ago we had 50 to 70 people. We”re responding to the demand in the market.

BUSINESS: You have had difficulty finding information system professionals in the past. Has that search become easier?

Lichtman: It”s still tough to find people. We have expanded our search nationally. We”re bringing people on board from different states and paying for their relocations. Our programming department is mostly foreigners. The rest of the company is being built up with people from all over the country. There are good people everywhere. We just have to find them. We have started advertising through the Internet. We are also contacting professional companies that actually specialize in bringing us the right people.

BUSINESS: Do you have any thoughts of joining your competitors on Wall Street as a public company?

Lichtman: We are exploring going public. We are still a private company, but we have already started pretending that we are public. We have quarterly and monthly objectives. We”re actually operating like a good hockey team. You have to fall many times before you get to the playoffs. Once you know how to fall, you know how to get up. We”re getting used to the idea of being public before we are actually there. If we”re going to be successful in this, and so far it looks pretty good, we”ll be a public company in the next year.

BUSINESS: What lessons have you learned in the past year?

Lichtman: We have learned to be prepared. Rather than operating the old-fashioned way like any small company, we decided to start preparing the grounds for the future growth. For instance, many times when we are adding people we are not doing it because we need them now. We are hiring them because we know what we are planning six months ahead.

BUSINESS: Are you exploring any other new areas?

Lichtman: We are working on new things. Everybody is now addressing the World Wide Web. We are trying to add some additional things that perhaps our competitors haven”t thought about. Another example is wireless technology. We”re taking the technology that exists in the production or factory-type market and moving it to the Help Desk. Help Desk people can walk around the floor of the factory with a laptop computer and find solutions to problems by just punching in the questions. It”s all about taking the technologies that are out there and making them so useful that people don”t know how they ever lived without them. We are also talking about a heavy integration with computer telephony. If clients can resolve their computer problems by calling the Help Desk, and through voice-recognition software dealing only with our database, it will save time.

BUSINESS: Where is MagicSolutions headed?

Lichtman: I have a feeling that in two or three years, it will be a $500 million company in Wall Street”s eyes.

BUSINESS: What are your thoughts after 10 years in business?

Lichtman: What has happened here is good, but it”s not incredible. It motivates everyone to see people so dedicated. If I want to be the first person in the office, I have to get here before 5:30 a.m. I”m very happy at what the company has become, but sometimes I feel badly. The company just had a luncheon celebrating our first month with sales over $2 million. So many people were there. I knew all the faces, but I didn”t know all the names. There”s no excuse for that. I need to find more time to talk with them and shake their hands.