How Big Will VOIP
Testing and Keynote Get?"> How big do you believe the opportunity is for VOIP testing and mobile applications testing? Huge. I predict eventually our VOIP and mobile and streaming business will be just as big as our current Internet business is.As the Internet grows, our goal is to get all our customers to recognize the importance of these new advanced services. Who is your biggest competitor? We have a big portfolio of services. We compete with different companies depending on which service youre talking about. In usability, there are individual consultants. There arent many technology companies that sell this [kind of service]just expert consultants. Often people use older-style surveys or lab-based usability studies. People are doing it the old-fashioned way. For our core service level management business, theres either a service like Gomez or Mercury [Interactive] with testing software. Mobile is still an emerging market. Over time we will end up competing with some of those players. Keynotes $148 million in cash is a nice nest egg. Are there any acquisitions on the horizon? Will we see the pace of acquisitions pick up? Its actually $135 million now. Were doing a lot of stock buy-back. Weve had more cash than required to run the business, so we buy back shares to reward long-term shareholders. With acquisitions, most of those have been done with cash. Were seeing profits generated from those. I cant give specifics on near-term acquisitions, but we are interested in the mobile Internet. We can buy for critical mass. Also, we want to increase our presence in Europe. We could buy there. As far as our acquisition pace, its hard to predict. If we find the right company at the right price and with the right culture, we buy. Theres no timetable for that. Do you ever see Keynote broadening beyond services into productstools for exampleor more professional services? Services are products. Its one of the few effective models in the systems management area. The services we offer are subscription and consulting. Ninety percent of our service-level management services are subscription-based. We dont want to go too heavily into consulting services. In mobile, we are open to both consulting and systems. A big part of what you do in mobile is private testing. Carriers need systems for testing. With content testing, they may want these systems in special places dedicated to [a single carrier or service provider]. Weve been open to starting to sell applianceswe already have agent appliances.
Ultimately, our goal is to focus on subscription services. Even Microsoft is moving to subscription licenses.
We started the business in 95 and from 97 onward weve always been [focused on] subscription service. That wasnt accidental. Ive been in the technology industry 30 years and wrote Oracles business plan in 81.
Having seen the problems with shelfware, software bloat, software complexity and total cost of ownership skyrocketing, we anticipated years ago that the software industry would go through a metamorphosis and saw it would change the licensing model.
Whats your vision for Keynote beyond where its at today?
We want to be the preeminent company whose focus in life is to monitor, measure, diagnose and improve online business performance. That wont change. But how we deliver that will change as technology changes. As customers move and grow, we grow.
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