Reinventing Progress Software—Boston’s Next Billion-Dollar Company? Part 2
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more than 60 percent of our revenue comes from outside the U.S., let alone outside of Massachusetts. Even though we may be headquartered in greater Boston, our 250 people in India are also Progress people, not just Indians who happen to work for us. We are a global company, and therefore what goes on in Raleigh-Durham, North Carolina, is as important to me as what goes in Massachusetts.
But having said that, culturally I prefer the East Coast. The quality of the schools in this area, the whole educational system, the people, the R&D culture, and the people who really sit down, think, and analyze. It’s not just about the exit strategy here, it’s about making a company really successful and making customers successful. We just bought a California company, but as an East Coast company, I’m generally wary of acquiring West Coast companies, because it’s instantly “What’s in it for me?” Acquisition is seen as an end, not a beginning.
But at the same time, there are very few people you meet in California who have been with the same company for more than five years, and there’s something to be said for mixing up the gene pool. We’ve done it ourselves, just by buying companies.
X: Do you see Progress staying independent for the long term, or is there some chance you could get swept up in the wave of tech mergers yourselves?
RR: There are only four or five strategics [big enterprise software companies] that could afford to buy us. One is in New York, one is in Massachusetts, and all the rest are in California. The New York one being IBM, of course, and EMC being the one in Massachusetts. I don’t see any synergy with EMC, and as far as IBM, there’s too much overlap. The same with Oracle out in California. So the way I look at it, we’re very likely to remain independent. From my perspective, that is also the best way to maximize shareholder value. I am not interested in selling out at a 10- to 15-percent premium on where we are today. But I don’t own the company. If somebody comes along and makes the shareholders an offer they can’t refuse—that could happen.
X: How do you think the growing interest in cloud computing will affect the market for your software?
RR: We often use the term “future proof.” When the original Progress customers back in the early days of Unix and PCs were writing code, certainly nobody then envisioned client-server architectures or the Internet or Web services or SOA or anything like that. But that same technology has carried onward and works well in those environments. I look at the cloud first and foremost as a business model and a platform. It’s a platform in which all of our customers products and our products will plug into.
JB: A large percentage of the partners deploying our applications are deploying them in the cloud. 95 percent of new licenses for our application development platforms will be sold and licensed to be used in the cloud.
RR: But we have no intention of becoming a cloud provider ourselves. Some companies are using our tools to enable that, like BT. We are more like an arms supplier to those companies.
X: What about the mobile computing revolution—how does that change the nature of business processes and complex event processing?
JB: You’re right, the cloud is everywhere, and every object is mobile. An object that is in Seattle could be somewhere else shortly. We have to anticipate a world like that. We have a partner called match2blue that offers location-based social networking and content, with millions of users around the world. Say that they want to offer real-time networking—if two people who are both interested in the NFL come within a certain range, they might get connected. The challenge with that is that each of their 10 million subscribers is a moving event, with changing locations and profiles and desires to communicate. Knowing when you are within range of any of the other 9,999,999 users is a computationally explosive problem. But that is the kind of challenge that you have to be able to handle with business process management. We don’t have the answer yet, but we are working on it.
X: Any final thoughts?
RR: We want to double the size of the company and go to market as one Progress. We want to promote Progress as the brand in ways we’ve never done in our history, and we think we have a really effective set of products and a go-to-market strategy for those products. We feel pretty good about our prospects. We’re like a $500 million startup. We’ve got the financial wherewithal, the assets in terms of products and people and customers. At this point it’s pure execution, and I think we’ve got the right vision and the right strategy.