Monday, August 15, 2016
Interview with Jeff Erramouspe, Spanning Cloud Apps
How do you successfully take a small, startup company, and keep it growing and thriving after it's been acquired by a big company? Jeff Erramouspe, the head of Austin's Spanning Cloud Apps (www.spanning.com) tells us all about the company's transition from small startup to a division of EMC, how and why it is continuing to grow--plus how the company fits into the world as EMC itself is acquired by Dell.
Just to remind our users, tell us a bit about your products?
Jeff Erramouspe: We do data protection for SaaS applications, specifically talking about Google Apps, Microsoft Office 365, and Salesforce.com. Those are the three commercial application we provide backup support for. Where we primarily focus on, is protecting users who use those products from what we call user-caused data loss. That could be people making mistakes, accidentally deleting things, accidentally overwriting things, but what is even more prevalent nowadays, is actual, malicious intent—such as insiders who are trying to damage a business for some reason, or outsiders trying to hack into a business, and who are maybe holding their data for ransom. You might have heard a lot about ransomware recently. We provide outstanding protection against those attacks.
It looks like you're still continuing to grow after the EMC acquisition, what is driving that growth?
Jeff Errasmouspe: Growth is strong, though I can't provide specific numbers. From the revenue and booking perspective, we've had very strong, year-over-year and sequential quarter-over-quarter growth since we were acquired. It's been really exciting seeing our products taken to market by a much larger and mature enterprise sales organization. That's really the focus, and the whole reason EMC purchased as. They are the market leader by far in the on-premise data center and data protection products. Their Data Domain lines is hugely popular, and they have a big market share with products like that, which do very well. They have a broad portfolio by far in the on-premise, data protection market. As they have seen a lot of those on-premise workloads moving to the cloud, they realized two things. One, as workloads moved to the cloud, that puts some of their on-premise at risk, and they also have risk of customers moving products to the cloud. Those customers moving to the cloud still suffer the risk of data loss. So EMC acquired Spanning, they plugged both of those holes. It's a really nice fit all the way around. If you look at the EMC customer base, there is a very large percentage using Salesforce.com. That means it's really ripe for us to go in and sort of flow in behind a trusted vendor, selling to Salesfroce.com customers. Plus, virtually all of their customer use Microsoft Exchange on premise, or they are moving their emails to Microsoft Office 365 in the cloud. Both of those angles make it a really great, go-to-market partnership with EMC.
How has the shift been from a small startup to becoming part of a big company?
Jeff Errasmouspe: I won't say it's without challenges, it definitely has. We had to learn, in many ways, how to speak in each others languages, which we have. I was just out at a sales meeting with our primarily sales partner inside EMC and his team. I was telling them how, when we got acquired, we had a very traditional, inside sales, transactional Software-as-a-Sales model. We used to do small transactions, lots of them in a quarter. Then, when we got acquired, we found that EMC is filled with big, enterprise sales people, who are the best in the business. The problem was, the enterprise guys are used to doing million dollar deals, and my guys were used to $10,000, $12,000, and $25,000 deals. They spoke a completely different language. It took us awhile to get things working. We discovered we needed some different kinds of talent to approach that enterprise market, so we've had some turnover, but we found we've been able to bring in people to create more of an enterprise orientation and who understand SaaS. We've found it real nice working with our EMC counterparts, and it's been a tremendous success.
What's been the biggest lesson you've had going from a startup to a big company?
Jeff Errasmouspe: It's funny, I was at a big company before I cam here. I was at NCR ,then Compaq, and then I came to work at a startup in Austin in 1997. I spent nineteen years in startups before the acquisition by EMC. So, for me, personally, it's been kind of re-energizing all of those big company muscles. There are different skills, and you can't make decisions as you used to. When I was at the top of the chain at Spanning, I could make whatever decision I wanted at any point in time, and when you saw a problem, you could come up with an action plan. The decision cycle takes a bit longer now. However, it's nice that I don't have to raise money all the time. One thing I don't have to do is court venture capitalists all the time, which was an exceptionally time consuming process, and just focus on the business itself, engaging with customers. That said, you do have to fight the budgeting cycle and justify the investment inside the company.
For the startup founders here trying to figure out how to get a company interested in acquiring them, what was it about Spanning that made you attractive to EMC?
Jeff Errasmouspe: I think in many ways, it's been about our product set, and they certainly bought us for the hole we filled in the market. From my perspective, what also closed the deal, was they looked at our talent and management team. I think for a startup company, we had a really, mature management team. The vast majority of us are 18-to-20 year industry veterans, but in addition to being good managers, we were also able to contribute on an individual level. When you're at a startup, even as CEO, a big part of what you do is individual contribution, day in and day out. I think what they saw in us really put us over the top. My advice to other entrepreneurs, is to think about what you need to do to build a strong as a management team as you can. Don't be afraid to bring on people who might challenge you for power and authority. Obviously, you don't want political types, but you don't want to be afraid of people who are willing to argue with you, and help you get it right, and through constructive conflict, can strengthen your company so that it's attractive as an acquisition down the road.
Finally, how does the acquisition of EMC by Dell affect you?
Jeff Erramouspe: It presents some good opportunities, particularly because of what we do for Office 365. Dell is actually one of the largest resellers of Office365. They look like a big channel partner to Microsoft, so there is an opportunity to attach to that sales machine, and have a captive audience which will help drive Office 365 sales. Obviously, it also means the headquarters is here in Austin, so we won't have to travel as much for meetings, and I think we'll see more people coming to see us here rather than the other way around. Spanning, and the rest of EMC, really does see the opportunity to really become part of the vision of what Michael Dell is trying to accomplish. The strength of the two companies will really create a powerhouse, with exceptionally strong product and sales organizations, which I think will do nothing but benefit us overall.