Bootstrapping Using Services From Houston: Identity Automation CEO James Litton (Part 5)

Sramana Mitra: All your existing K-12 services clients came with you to this product?

James Litton: Yes, because we were extremely focused on the customer. That continues to be a central part of the Identity Automation ethos. It’s not just paying lip service to it, but actually living up to that. I think the real testimony to how effective we were is that we had about 80 customers, and 79 of them came over.

Sramana Mitra: You had done all these projects to set up all their identity management. It was done on others people’s products like Novell and Sun. What was in your product that came on to? What was special about your product?

James Litton: There’s a couple of reasons why they came. First and foremost, I would say that relationship management is a huge piece of it. When it came to the technical justification for making a jump from product A to Identity Automation was because we made a good technical case for why that made sense. That was primarily focused on ease of use. The customer didn’t have the capability to self-manage most of these other very large solutions once they were in place.

Every time they wanted to make a change, they had to come back to a consulting company like us because the product was so complex. One basic tenet of the platform was to make the product very easy to use. Right from the get-go, we were focused on making sure that the product was logical and very easy to manage. Everything was managed within a single pane of glass unlike some of these other products that were really a suite of products only in terms of marketing. They had purchased different products and put a marketing wrapper around it and said, “Hey, this is a suite of products.” Ours truly was a suite of products. It was built from the ground-up and was meant to work together. It was much easier for the customer to use it and maintain it.

Sramana Mitra: 79 customers of the 80 came on to your product. All of this conversion happened in 2010?

James Litton: Yes, we made very rapid progress in obtaining new customers, but also converting existing customers. The conversion process of existing customers probably happened over 24 to 36 months.

Sramana Mitra: In the new product, were you still doing products and consulting services?

James Litton: Absolutely. That was critical to the conversion process. We did third-party consulting probably up through to 2013. Obviously, the focus was to trail off of that, but we didn’t complete that process until 2013.

Sramana Mitra: I would like to understand how you charge for the product. Talk to me about the product business model.

James Litton: This was one of the other reasons why customers came to us. We were very cautious about how we priced the product. Since we had been selling to these K-12 customers, we understood what buttons to push. One of the things that frustrated them was how they were being charged for products by the other vendors.

Most of the other vendors charged on a per-object model. That basically meant that if you have a user in the system, it didn’t matter if that was an active employee, an external user, or a terminated employee. If they were in the system, you were going to be charged for it. These education customers are very sensitive to this model. They didn’t like that at all.

We made a strategic decision to not charge that way. We were going to charge based on full-time employee head count. That was a very critical decision. Our customers immediately took to that approach. In fact, other vendors have since adopted that approach and have emulated what we have done in education.

Sramana Mitra: So it’s per user per month?

James Litton: Per full-time employee per year. You buy it for a year at a time.

This segment is part 5 in the series : Bootstrapping Using Services From Houston: Identity Automation CEO James Litton
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