Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – August 19, 2013
CEOCFO: Was there a particular push into government over the last year and why would this be the time to do so?
Mr. Downes: Our value proposition has always been producing products at a very good price without compromising on performance, quality, or support. With federal budgets being cut a lot recently, the federal government is really looking to maximize the return on their investment. It seemed to be a natural extension for us; for instance, there is a security standard called FIPS and we brought a FIPS market to product early last year. This product is opening up a lot of opportunities in DoD. It has helped us open up doors and have discussions. Our value proposition is that they can get very good product from KEMP at maybe 40% of the price of some of the branded competitors also targeting this space.
CEOCFO: How are you able to provide a solution at such a cost effective range?
Mr. Downes: Firstly, in our particular technology area a lot of the vendor margin is very much tied to the combined solution of hardware and software. As I said earlier we are primarily a software company that happens to also deliver its IP on hardware if the customer prefers it. We are not averse to decouple the hardware from the software. If somebody has their own x86 hardware such as a Cisco UCS, we will allow them to buy our software and run that natively on their own Cisco hardware. The competitors of KEMP won’t do that as it is probably core to their revenue and margin model. We have an OEM partnership with Dell where our s/w is deployed on Dell standard hardware but with the added benefit of access to their world class services and support organization in 123 countries. We optimize our product to run on specific hardware and we get validated by the hardware vendor to do that- the branded name such as Cisco or Dell.
CEOCFO: When you speak with a prospective customer, do they understand immediately or is there an “aha” moment where they understand that KEMP is different and superior?
Mr. Downes: In the early days of KEMP prior to my joining, the founders were very much experts in this technology having worked for what are now competitors. They saw that the competitor’s product was actually quite complex to understand and deploy. They felt it was a great opportunity to bring out a product where ease of use was part of the DNA of the product and clients would receive great value for their money. That is the one constant we have kept the whole way through to today. Rather than having to go on a paid training expedition to the west coast for five or ten days for ADC deployment training, we can have you trained in three or four hours remotely online in terms of how to deploy our product. I think that is certainly one of the “aha” moments. The other one is that we know that our typical customers do not need all of the features that are out there, yet they end up inherently buying a product that has all of these features that they are not interested in. We have been very selective in the features that we put in so that they meet the requirements of what our customers are actually looking to deliver.
CEOCFO: How do you reach potential customers?
Mr. Downes: We are a 100% channel focused company and by that it means that we are trying to reach small and mid-enterprises so you need channel partners to help you get out there and extend your reach. The channel is an extension of our sales and supply chain and all of our activities are very much geared to working with and educating our partners to help us acquire customers. We have a substantial web marketing engine to generate leads which we push to the channel. They love that aspect of their partnership with KEMP. We do a lot of focused trade events with our strategic alliance partners such as Cisco, Microsoft, and Dell. We have a new relationship with Oracle, which we are starting to get some traction in as many of their software solutions perform better when load balanced. We will market to that installed base with our partners.