This week’s Deal Radar series begins with coverage of Operational Memory LLC, which launched its first solution, a social networking application for enterprises, in September 2008. Founded in 2005 by two “soccer dads” who got to know each other and their areas of expertise over several seasons of girls’ soccer, the SaaS company is based in Raleigh, North Carolina. Co-founder Michael Trapp, an expert in systems/software development, and his partner, a mysterious senior executive at a Fortune 25 company whose name Trapp won’t divulge, worked nights and weekends to develop OpMem’s structure, features, and algorithms.
The OpMem ® application is an enterprise collaboration software that lets organizations leverage internal collective knowledge and expertise. The application, a low-cost alternative to Tacit, combines on one screen all pre-valued, ranked, and prioritized files, information, and data plus web sites, emails, conversations, ideas, and recommendations from all employees and networked sources.
Michael Trapp described the application as “a unique network utility application for organizations that captures the worth of information, data, experience, and expertise – as it is being used.” You can also read my story on Tacit recently in Forbes, where I have painted the vision of a socially networked, collaborative corporation of the future.
The solution is priced from $7.50 to $9.00 (per user) per month on OpMem’s servers. However, if the company wants to deploy the solution on its owns servers, the subscription is $4 to $5 (per user) per month.
The company‘s current release version OpMem® Client/Server to small businesses and mid-market and enterprise size organizations. The company did not share any details on whether there have been any takers for the application as yet. Trapp has a broad vision for the market size he is looking at: “OpMem® is a true horizontal software application that can be sold into any SIC industry or vertical market. There are 129,673 firms in the United States that have over 100 employees and 16,369 firms that have over 1,000 employees. This is our market. If you take in all company sites, the aggregate total is 820,066.” He added that the company also believes US government agencies at all levels are a potential market. My assessment, having worked with clients in this space is that only large enterprises are buying these products, and OpMem’s market really is in the 16,369 firms that have 1000+ employees.
At the moment, the company is concentrating only the English-language version. Trapp said that though he did not have any forecasts for versions in other languages, he foresees revenue of up to $140 million over the next seven years.
The company has raised $155,000 in angel financing and is looking to raise another $450,000 soon. They company plans to raise the second round to roll out OpMem® nationally and to finish a browser-based version. The company plans to convert OpMem® to a browser-based/Web 2.0 SaaS application. OpMem® SaaS will have the same back-end architecture with a new browser-independent interface, while the current shipping version would be sold as a Windows SaaS subscription product.
Given that the product is applicable only to the largest enterprises, OpMem will need a great deal more financing to be able to develop a sales channel and a strategy that has even a remote chance of success. This is a very early stage company, in an interesting space, but it has significant go-to-market challenges that Trapp seems unaware of.
This segment is a part in the series : Deal Radar 2008