Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – August 19, 2013
CEOCFO: KEMP has clients worldwide but are there areas where you would like to have a greater presence?
Mr. Downes: Yes, we asked ourselves that question about twelve months ago and I put a significant investment into Asia Pacific. Back in 2010 when I joined the company, only 8% of the company’s revenue was coming from international. It is now 46%, and a significant portion of that has come from Europe but Asia was the next area where we felt our solutions would resonate. Asia-Pacific customers are always looking for value for the money, so we established a KEMP branch headquartered in Singapore and we have resourced the region with an experienced team of ten people. Australia, India & South East Asia were the initial focus markets in that region however we have just fast tracked China because of interest there. Asia Pacific is up 249% year on year and we hope that the region will contribute about 10-12% of our global revenue within the next few years. Even though Japan is part of Asia Pacific, it is a very different market. We are just in the process of establishing a KEMP Japan entity and we hope to have that up and running by Q4 this year. Outside of the US domestic market, Japan is the next single biggest country market for application delivery controllers.
CEOCFO: In technology, ideas change every day. How do you keep up with all of the potential changes that may affect what you are doing? How do you know what to pay attention to and what will likely go by the wayside?
Mr. Downes: We have put a lot of resources into our product management function and we do a lot of industry research. We do a lot of looking at what other vendors are doing and we look at a lot of what the analysts are saying. We have very good relationships with the likes of Gartner, IDC, Dell Oro so we are briefing and inquiring all the time. We then look at where we can be relevant in our market for our customers. We do not see ourselves as bleeding edge but we are fast followers and that is the continued route to our success- looking at where the industry is going and getting in there at a stage where the market is in a growth cycle. We are actually looking three years out at the moment in terms of our product development cycles. That is something that you can afford to do when you are on the type of growth path that we are. We have had 510% revenue growth over the last three years and we are now looking at the next three years out to 2016 with confidence
CEOCFO: Many companies tell me that they have difficulty finding competent people for their technology. Do you experience that as well and how do you find the right fit for KEMP with both the technical and people skills?
Mr. Downes: People and teamwork are absolutely critical. In the early days when I came on board we had a small team and every single one of the people we brought in had to work out for us because we did not have any margin for error. We took incredible care in the recruitment process and in reference checking. We went out to a network of known good people that we had either worked with before or people that were recommended to us. Our core group came through that approach. As we are expanding, however, we cannot do that so we have taken on more scientific methodologies. There is a system of personality checking out there called predictive indexing (PI) and that was introduced to us by an Irish management consultant that we work with quite a lot. He works with my management team on strategy. We have taken on predictive indexing to help us make sure that we get the right cultural and skilled people coming into the company. We use predictive indexing with all employees to help us understand individual management needs and in putting cross functional teams. In terms of the recruitment process, they are a few things that we did. In Europe and specifically in Ireland where are headquarters are, we have very good headhunter relationships who know our culture and where we are going as a company. In the US, we actually brought in dedicated recruiter under our own roof. That has worked to help us clear the backlog of critical positions that are required this year.
CEOCFO: Why should people in the business and investment community pay attention to KEMP Technologies?
Mr. Downes: Our track record over the last couple of years stand up for itself. We have had a lot of revenue growth and recognition. We think we are doing a lot of the right things, and our investors are very happy with their return on investment 18 months down the line. We have options to bring in round B funding this year, ahead of plan to build on the momentum. I know we have assembled a world-class management team and leadership team and we are in an industry that is a very interesting place to be at the moment. There is a lot of new technology areas such as software defined networking and network function virtualization that gives us a deep relevance over the next number of years where IT is undergoing a paradigm shift. We think that we can leverage that change to continue our growth curve.