If Brendan Nolan (pictured) isn’t a patient man by nature, business may well have made him that way. As he reflects on the sales pipeline for his company, it has involved no small amount of waiting but the payoff appears to be nearing.
The Waterford Technologies CEO says that the company is beginning to see customer leads develop into purchases following long sales cycles. The Irish software firm, which develops email archiving and reporting tools, currently has approximately 350 customers; 90 in Ireland, 80 in the US and the remainder in the UK. Nolan has high hopes for the latest addition to its range, MailMeter Archive: “This will significantly expand the customer base,” he says.
Initially the core MailMeter product had been a reporting tool that allowed businesses to see the context but not the content of email correspondence: for example, John sent Mary 100 emails. “When we went to the US market, companies there told us: ‘It’s a nice idea, but it doesn’t do enough’,” Nolan relates. “Initially, we didn’t bother looking at content but as we looked more to export markets the demand was there and that was forcing the issue.” From a technical standpoint, it wasn’t difficult to add archiving capability to the product, he says.
Outside of its main function, MailMeter has proved useful on several occasions in resolving disputes. In one case, Mayo County Council settled a contract disagreement earlier this year using MailMeter Archive because it was able to prove that a disputed email had in fact been sent from a council officer to an external contractor. The council hadn’t bought the product for that purpose but it saved a potentially expensive trip to court.
“The key thing we’re trying to do is to try to deliver value from the [email] archive,” says Nolan. “Data taken and stored has no real value; our forte has always been our reporting capability – taking the context and indexing it, making it searchable. A manager can say ‘Show me all correspondence relating to a particular subject’.”
The idea that every email is stored for a period of time could raise concerns over possible invasions of privacy, but Nolan makes a reasoned defence. “You’re not being intrusive,” he counters. “Nobody has the time or inclination to look at every email you’ve ever sent, but if there’s an occurrence, then you can look it up.” He points out that as the email is on a company server to begin with, users should conduct their business with that in mind.
Appropriately for a company selling to different markets, its product set can scale up or down according to customer needs: the largest Mailmeter user is a US organisation with 40,000 email accounts. “We have plenty of customers in the 5-10,000 range; we can cope with that very comfortably,” says Nolan.
The software is constantly being upgraded; it currently supports two of the leading email platforms, namely, Microsoft Exchange and Lotus Domino and much of the software engineering effort goes in keeping the product up to date with the latest versions of both. In the future the company hopes to broaden its reach by becoming compatible with other email platforms including Novell GroupWise and even other communications software such as instant messaging tools.
Waterford Technologies’ marketing spend is “frugal” says Nolan, but the money is invested wisely. “We put a lot of energy into our web presence and our Google ranking,” he says. “People go to Google, or Yahoo! to a lesser extent, they put in ’email archiving’ and they might call the first six companies that come up. In the IT industry in the past, you might have depended on a reseller or trusted adviser to tell you about new products, but a lot of companies are doing their own evaluations, so it’s imperative that we come up on the radar.”
There’s no denying that sales cycles have noticeably lengthened in the recent past. Having had its products evaluated by some organisations as far back as two years ago, now Waterford Technologies is at last in the frame for when customer prospects are releasing funds for new email projects. This gestation period simply reflects the current state of the market, Nolan believes. “There’s not too many IT guys spending €20,000 because they feel like it. You’ve got to wait for these things to come around. The fact that we’ve been around for a while and are still here means that we can reap some of the benefits.”
In the meantime, support contracts for the software products have helped the company to stay around. “At the start of every financial year, we know there’s X amount of revenue,” Nolan relates. “That’s the nirvana for a software company — to cover its cost base purely with support contracts. We’re not there yet but if we were to get to 1,000 customers we wouldn’t be far off it.”
The costs involved in localising the product into another language has meant that for now, Waterford Technologies has concentrated on the US and UK markets in addition to Ireland. Ideally, Nolan hopes the company will have “some type of European presence” by 2007. The advent of Basel II legislation will force a lot of compliance activity in the financial sector, a market that the company is keen to tap.
Nolan doesn’t view the US as a radically different marketplace and simply having a presence there doesn’t guarantee instant success. The waiting game still applies. “It’s no different than here. There are no budgets for discretionary spending and the same timelines apply, really. From our perspective, it’s a question of building awareness and having sales opportunities in the pipeline.” He likens the situation to that of a young footballer starting a career in the lower leagues before earning a transfer to a bigger club. “You can’t just arrive at Old Trafford and say ‘I want to play for Manchester United’.”
A view frequently advanced in these discussions has it that Irish software companies lack sales and marketing expertise to break through this barrier. “It’s very true,” Nolan says, agreeing up to a point but adding an important caveat. “The Irish Software Association’s (ISA) point about sales and marketing experience, I think, is a byproduct of the size of the market here,” he observes. “The people who work for us in the UK and the US are English and American. We haven’t tried to ship someone over — we’ve recruited locally.”
Waterford Technologies’ current revenue is around €2m but Nolan plans to double this amount over the next 18 months, a target he believes is achievable. “We’re really working hard to break out of the mould of being a €1m or €2m Irish software company – there’s lots of them around.” He’s aware that the ISA and Enterprise Ireland are raising this issue constantly and talking of the need for indigenous companies to grow beyond this level. “We still fit into that box but we have the potential to get out of that,” Nolan confidently asserts.
By Gordon Smith