Bootstrapping Using Services: eMazzanti CEO Carl Mazzanti (Part 4)

Sramana Mitra: Does that mean that you were building more like a toolkit as opposed to a full blown architected product? You have a toolkit that you apply wherever similar problems crop up again. Does that describe the scenario better?

Carl Mazzanti: If you look at where we are 15 years from now, the primary verticals have changed. What problems we’re solving for customers today is different than it was 10 years ago but the email filtering company will most certainly run for a long time. But that is not the current growth story of the organization. That was the growth story for maybe our eighth year in business. In the technology space, your cheese moves around.

Sramana Mitra: I understand that at year five, you came up with this email filtering product. That was one of the major moves that you made in a product direction. It sounds like you’ve made more shifts in your strategy naturally because you’ve been in business for 15 years. At the five year point when you brought the email filtering product into market, what did that do to your business in terms of scaling? Did it double the business?

Carl Mazzanti: We have grown 20%+ every year for 15 years. It’s been a consistent growth. At the very beginning, we grew at triple digits. After the first four or five years, it’s been 20%+. When we’re 60% plus, it’s too much.

Sramana Mitra: Specifically, at the five year point when you introduced this product, what did that do to your business? How did that change your business?

Carl Mazzanti: It turned us into a multiple recurring revenue organization which had not existed in the past. It started to cannibalize some of our hardware sales. We experienced that very early on. It’s a change that is occurring in our market today. Everyone calls it the cloud. We entered the cloud over a decade ago with what I would say ‘shared services’. We’ve been in the cloud shared services space for a very long time.

Sramana Mitra: That gives you predictability. Even though it cannibalized the hardware business, it started putting predictability into your cash flow.

Carl Mazzanti: Yes. We grow well but we’re not a rocket ship. When the economy is doing poorly, we’re still growing at 20%+.

Sramana Mitra: What you’re saying is you have developed a consistent business that is not impacted hugely by economic downturns.

Carl Mazzanti: That would be correct.

Sramana Mitra: What’s the next major strategic shift? You started to talk about having made other strategic shifts. When was the next strategic shift after going through that predictable revenue model?

Carl Mazzanti: Vertical focus is probably the next big paradigm. In the shared services space, we started offering hosted exchange. We started managing our customer base’s assets and firewalls around the world. Every month, we would manage their assets and put them in this predictable model. All those things happened over the next five years. Now, they all seem very natural – offering hardware as a service or infrastructure as a service. We were very early adopters of all of them. That was probably because of our shared services mindset.

This segment is part 4 in the series : Bootstrapping Using Services: eMazzanti CEO Carl Mazzanti
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