The 1M1M Deal Radar 2010: xMatters ,Pleasanton, California

What matters to you right now? Whatever the context, that’s the question xMatters tries to answer. xMatters (formerly known as AlarmPoint Systems) is a pioneer in relevance engines. As AlarmPoint, the company built a reputation as a provider of IT alerting solutions. Now, it has broadened its scope and developed relevance engines, a new technology for delivering information. Relevance engines connect people, processes, and information and thus help people become more and capable and organizations more agile and competitive.

The Pleasanton, California-based company was founded by CEO Troy McAlpin, a serial entrepreneur and consultant for AT&T Solutions and Andersen who observed that clients were always struggling with an underlying problem: knowing what a person wanted or needed was highly dynamic. And, today, highly mobile.

The company began by supplying a global alerting platform for IT personnel who needed to be more efficient, and this worked well. However, xMattters (then AlarmPoint) observed that clients were trying to take its platform and solve unique problems in other areas of the company. So it developed its engines so that they could provide mass personalization – a personal experience to a large number of people.

xMatters defines a relevance engine as “a capability that can be added to existing applications and technologies to connect people with relevant information, notifications, choices, and actions at exactly the right moment.” Unlike search engines, e-mail, RSS feeds, business applications, or websites, claims Xmatters, relevance engines are a way to receive relevant, dynamic information in real time without wasting time weeding through unimportant information. The engines are used in four broad areas: IT services, risk management, customers, and innovative product development. The company’s platform is delivered through an SaaS model and comes in four editions, Express (1–10 users), Standard (25–100 users), Professional (50–500 users), and Enterprise (unlimited users).

As specific examples, xMatters’s relevance engines, when combined with health care IT company Cerner’s solutions make hospitals more efficient in managing patients. GE has reduced incident response times by up to 85%. When combined with Vodafone’s customer care system, the engines inform people of service issues so that they are not frustrated. Schools use xMatters’s relevance engines to help inform parents when there is an incident involving the safety of their children. According to Atomic Marketing Blog, e-mail marketers could use them to help make bucket testing easier.

The company calculates there is a $5 billion marketplace across the IT industry, the business continuity industry, and in serving companies that build new products and are focused on customer satisfaction. xMatters is targeting organizations in the following sectors: energy, for smart grid management; educational institutions, for safety; financial services, for market moves and customer connection; telecommunications, for efficient operations, recovery and customer connection; healthcare; for smart hospital rooms and emergency response; government agencies, for readiness, effectiveness, and response; and managed service providers, for differentiated cloud services. Within those segments it turns to CIOs, CTOs, IT managers, network operators, CMOs, risk management professionals, emergency preparedness professionals, and VPs of products to help initiate the deployment of the relevance engines.

xMatters says that many other companies such as Sybase, Varolii, and even IBM will enter this market.  TelAlert, Attention Software, and Augur are other notification systems, but Augur’s solution is integrated into an event management system and, the company says, is not meant to compete with commercial notification systems. As the first mover in this market, xMatters believes it has the advantage, technically and in its understanding of what matters to its clients’ customers.

At the time of the company’s founding in late 2000, the dot-com bubble had burst, and xMatters (then AlarmPoint) was bootstrapped. “We all remember our first enterprise deal over $100,000, it was Nextel. And Nextel knew they were first and wanted to be first. They needed our system, and we were the only ones that could deliver. The good news, we did,” says McAlpin. By 2005 he and his team had built the company to $3 million a year. xMatters became cash flow positive 16 months ago and surpassed the $20 million run rate last year.

The company’s more than 800 customers include seven out of ten of the Forbes Global 2000, such as Verizon, Nokia, Vodafone, Barclays Bank, Cisco, and HP.

In the next few years, xMatters aims to expand its operations to other countries besides the United States and England, and it may take on funding at that time. The company will also continue to develop its core platform so that it can continue to build relevance engines and enable others to build them.

xMatters believes it is building a business that will be around for a long time. While it doesn’t have any preconceived notions of “going public” or being bought, its members try to ignore the fantasies and focus on organic growth. “If we continue growing at 40%–50% year-on-year, generating positive cash flow, which we reinvest, then we are providing clients, investors and employees with an opportunity you don’t find every day. Plus, we’re having (a lot) more fun that way,” says McAlpin.

Recommended Reading
Towards Personalization: Strands Founder Francisco Martin
The Audacity of Tom Costello

This segment is a part in the series : The 1M1M Deal Radar 2010