Keynote Systems may not be a household name in the consumer world, but it has set itself apart as the leader in testing Web sites and applications for performance and usability.
After coming back strong from the dot-bomb fallout several years ago, the company is poised to kick growth into high gear.
With a handful of strategic acquisitions (12 since 2000) that broadened its range of testing and measurement capabilities—especially in the customer experience arena—Keynote founder and CEO Umang Gupta said he believes the company, based in San Mateo, Calif., has become the JD Power & Associates of the Internet industry.
At Keynotes first Executive Summit in San Francisco, Gupta outlined his vision of what the new Internet, or Web 2.0, is all about.
He said he believes new services for mobile applications and VOIP (voice over IP) that Keynote will launch shortly for Web 2.0 will fuel the companys next growth spurt. Senior Editor Paula Musich sat down with Gupta at the customer event to talk about Keynotes future.
Whats your idea of what Web 2.0 is and how do your new services address that?
The new Internet is about programmable, mobile and broadband. In each of those there is added complexity and problems with the customer experience that need to be diagnosed and fixed.
But that adds complexity and affects Quality of Service. Complex transactions behave differently from browser to browser and from one network to another. Our new service most important for programmable is Application Perspective 4.0 with its support for AJAX.
With client-side interaction theres a huge amount of special scripting required. The same is true for Java. [With AP 4.0] theres an element of scripting that allows our people and [customers] to create scripts to monitor [custom applications].
With broadband, theres VOIP [voice-over-IP] Perspective. The health of VOIP [services] is a recent [concern]. From a technical viewpoint, streaming [which Keynote already monitors] and voice are trying to do the same thing—send traffic across platform where no quality of service exists. When youre sending text, continuity doesnt matter. It does with voice.
The technology required to make VOIP work on the Internet is complex. Our job is to identify mishaps and make recommendations to fix those. The mobile Internet [requires] monitoring for handsets, networks and content. Weve done handsets monitoring for two to three years for carriers.
Now our Mobile Application Perspective services are enabling content companies—portals like MSN and Yahoo and enterprises too—to monitor the health of content and test quality. So when you deliver content, it is received and rendered correctly on hundreds of different handsets.
Keynote has been a relatively quiet company. Does the Internet world really know the company well enough to agree that it is the “JD Power of the Internet industry?”
Among the Internet customers who deliver Internet services, I think most would agree we are. We dont measure consumer goods like cars. But if you deliver Internet services—like Barnes & Noble, Yahoo, Amazon.com and so on, I think people know us.
You predicted that the company would become a $200 million firm. When do you think that will happen?
Were a public company. I cant say. Our goal is to be a $200 million provider to monitor, measure and [help] improve performance. We have a good shot at getting there by riding the wave of the new Internet.
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.
Do the math. There are 2,000 enterprises worldwide with a major Internet presence. All of them use our Internet measurement services. But only 10 to 15 percent of those use our more advanced services.
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 products—tools for example—or 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 appliances—we 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.
Check out eWEEK.coms for the latest news, reviews and analysis about productivity and business solutions.