Milestone Group Quarterly: January 2004
Articles
CEO Hot Seat:
John Laing, President and CEO, Inxight Software
Milestone: There is this enormous cost in corporations today of not being able to find information. Tell us how Inxight plays in the unstructured data management (UDM) space?
Laing: Inxight’s been in this space since the early eighties through the Xerox PARC relationship. Understanding that information, with the advent of the internet and the Ethernet, is spread everywhere. We’ve really been focused on this for almost twenty years now, helping customers find information when it’s everywhere. And it’s not just finding information that you know is there, it’s helping them find information that they don’t know is there. I guess that’s been the biggest value add that we’ve provided.
Milestone: By some estimates, there are 35+ companies in the UDM space. Tell us how you differentiate yourself and compete in this crowded market.
Laing: There are about 35 companies at last count. The real key differentiator for Inxight has been our total solution. Meaning the fact that we are from Xerox, and we do have twenty years of experience of Xerox PARC development. We have a total solution analogous to Microsoft Office. In the late eighties you had people that provided word processors, spreadsheets, Harvard Graphics did presentations, data bases. They all went away with the advent of Microsoft Office. We see the same thing happening, where Inxight can provide discovery, visualization, abstraction, similarity finding, and search, all in one product, in 28 different languages. That’s the differentiator.
Milestone: You seem to have a very strong channels footprint in defense and government. Impressive. How did you get there?
Laing: The roots of the company are in the OEM base, and we have large OEM customers like IBM, SAP, CA, and SAS, and last year we decided to go after the enterprise by integrating our solution. At the same time we went after channel partners to help us deliver that. In the intelligence community we have over seventeen partners delivering our solution, in the pharmaceutical market we went after five partners that are focused just on these specific markets.
Milestone: Some are calling 2004 the year of the sub $100M acquisition. Is Inxight predator or prey?
Laing: Inxight is absolutely a predator. We bought the assets of Whiz Bang! Labs a year ago, and that’s now incorporated into our technology, and we have an aggressive M&A strategy in place, and we have two people, full time, on that effort.
Milestone: You’re a three-time tech CEO, is it getting any easier or is it getting harder?
Laing: I actually think it gets easier, and the reason is customers are not just buying one of everything, they’re very very focused on buying the right thing, and I think companies that don’t just sell technology but actually deliver solutions are going to find that the path is much clearer. I guess also, with the grey hair, you learn to hire the right people, to focus on the right markets and not try to be all things to all people.
Milestone: There is a lot of industry buzz about how the software industry is destined to undergo fundamental changes--slowing growth, increasing consolidation, etc. How do you see things evolving?
Laing: We see growth accelerating. Our business will be up 60% this year, and our business plan indicates the same next year. I think, on the consolidation side that’s very much the case, and we are seeing that happen with Oracle going after Peoplesoft, we’re seeing that with EMC, and as we get out of this economic morass that we’ve been in for the last three years, I think large companies are looking for ways to accelerate their growth. So they are looking at new concepts and new ideas. And so I think you’ll see continued consolidation.
Milestone: You've developed and grown international offices and sales at previous companies. Are there any triggers you look for before moving internationally and any tips you'd share with young companies about international pitfalls?
Laing: The temptation is always the grass looks greener, and so people think, “Well, I’m having a hard time here, but it must be easier in Europe.” That’s the pitfall I think most companies run into. What we’ve done here is get our business folks and the government to continue our OEM activity and then really start to channel business, and that has allowed us to move into Europe and fund that. But we really have to stick to our knitting and get the focus right.
Milestone: We have all learned some lessons from the bubble and this swell economy. What do you think tech companies still need to learn?
Laing: What I think happened in the bubble was money was free and it created a lot of monsters out of that, and I think, in reality, it has been very difficult for a lot of people to accept. People still haven’t come to grips with the fact that it was a bubble. But I think out of that has come much better companies with a much better focus and much greater fiduciary responsibility.
Milestone: How do you see the role of VCs and institutional investors evolving in this new climate?
Laing: I think the fact that money is no longer free forces the VCs to be much more actively engaged. I know we treat our VCs like we do our employees, they are tasked with things that have to get done, and they are tasked with getting us into accounts, with helping us leverage their contacts. I think the VCs are spending more on fewer companies and are very, very focused on making those companies successful. On the institutional side, we have people like Reed Elsevier and Deutsche Bank, and Dresdner Bank, that are investors, and they are incredibly helpful in helping us get into their organizations as well as just penetrate the markets that they represent.
John Laing is President and CEO of Sunnyvale, CA based Inxight (www.inxight.com), a leading provider of enterprise software solutions for information discovery. John has over 30 years of experience in the technology industry, having held senior management positions with companies such as Symantec, Apple and Xerox. While at Symantec, as executive vice president of worldwide sales, he managed the company's revenues from $19 million to $600 million. During his career, he was also instrumental in the decision-making process and implementation of 14 successful acquisitions. Other positions held include executive vice president and COO of Food.com, and president and CEO of Wayfarer Communications. |
