Deal Radar 2010: Servoy, Amsterdam, Holland

Deloitte Fast 50 company Servoy BV is the developer of a hybrid (SaaS and on-premise modes) platform to help build and deploy applications faster than traditional development environments. Applications can be deployed both modes from a single code base. Servoy is used by independent software vendors (ISVs) to develop entire vertical and horizontal applications and by internal developers and consultants for custom application development.

Based near Amsterdam, Servoy was founded in 2001 by Jan Aleman (CEO), Jan Blok (CTO), and business development directors Andy Rooswinkle (Europe), and Yvo Boom (U.S.). Aleman and Blok met at university, and when not taking exams they were hacking together on their local Linux network. By 1993 they had built their first web shop, which sold computer parts. After one year and almost zero orders, they decided hardware was definitely the wrong business for them. After university, they had different jobs before joining forces at PDM, where Blok started research on what led to Servoy.

At the time Servoy was founded, only larger companies were making the move to Java (.Net didn’t exist yet). Most smaller companies, let alone ISVs, were not ready to make a move out of their toolsets. That changed once their customers or their competition went online. They then found that they had to rewrite 90% or more of their entire application. This was not an option for smaller ISVs.

Now, most fourth-generation programming languages (4GLs) are dying and Java and .Net are the only serious players. Other companies come and go but are Web only, are built by Web designers and not application developers, or are simply too complex. Servoy says that its tool allows companies to build applications in record time in an industry-standards environment. The tools are compatible with a full range of enterprise-strength databases from Oracle to Sybase to Microsoft’s SQL Server.

“Microsoft is doing a great job of marketing .Net, but from a technology point of view, they are missing the boat at every new release. The alternative is clearly Java, but that’s considered as being too complex and unproductive and for a good reason. That’s what we solve!” says Aleman. “Our software tools make it easier to turn apps into SaaS products than Microsoft’s complex .Net environment.”

The cycle of rewriting applications continues: Servoy says that in this multi-billion-dollar market, 85% of all applications are written in some non Java or .Net tool set. Some might never change (such as COBOL apps in banking) but most will have to be rewritten in order to be able to deal with current market demands. Cloud adoption has been growing steadily, and Servoy believes that 2010 promises to be the inflection point of wide-scale adoption. Those companies which were unaware or semi-aware of the cloud can no longer ignore the cloud’s strong value proposition of access to productivity tools, the ability to collaborate, and faster set-up.

Hybrid software development platforms, says Servoy, combine the best of two approaches to meet a range of customer needs and budgets. Before, one might buy 100 licenses for an app and find out later that only 30 people used them. Today, one starts by buying, say, 20 seats  and adds more as needed. But most modern SaaS platforms dictate that you use their proprietary platform, infrastructure, language, and limited browser-based development tool. “Then, says Aleman, “once you’ve developed and deployed your application, you’re at their mercy.  If you want to integrate with local hardware, local databases, or other local resources, you need to write even more code. What happens when your customer wants to take that same application and put it behind their own firewall?”

The top target segment is small ISVs that do not have the resources to rewrite in Java or .Net. These ISVs all have thousands of end users, and that’s where Servoy makes its money. On a more granular scale, targets are customer relationship management (CRM) 2.0, Healthcare 2.0, and social media/mobile enterprise. In particular, Servoy has the only iPhone application builder that allows end users to create custom iPhone applications “on-the-fly” without programming knowledge and deploy them enterprise-wide.

Servoy has facilitated development for over 1,200 ISVs with an average client development time of one year or less and an average of six to nine months to market. The company has partnerships and OEM deals with Sybase, PINS, and Verio. PINS and Verio manage the infrastructure part of the PaaS offering and  Servoy provides the development and deployment stack, ranging from the actual development tools to the application server and database connectivity.

Servoy started in bootstrap mode. In 2006, to accelerate growth, it did a $1.2 million seed round from Dutch venture capital firm Newion Investments. The company may do a real round this year in conjunction with its open-source move. Ideally, the next investment would be U.S.-based in Silicon Valley. Revenues are approximately $10 million.

Last year, the company opened offices in Singapore, Spain, Thailand, Uruguay, Argentina, Chile, and Brazil. It opened shop in Germany and France earlier this year. With the help of media recognition from publications such as Channel Insider, Servoy plans to continue to open more offices that will provide enhanced consulting and training capabilities and technical support during local business hours and in local languages.

Servy believes that an exit could happen the next three years, but right now they are having too much fun building the company. “Servoy R&D started back in 1997 and the founders have put too much blood, sweat and tears in it to go for an easy exit,” Aleman adds.

This segment is a part in the series : Deal Radar 2010