Joe Davis, a web analytics pioneer best known for his work at Coremetrics, has taken over as CEO of his one-time competitor, Webtrends, with the goal of boosting revenue growth.
It's a task that contributed to the demise of former CEO Alex Yoder five months ago. That's when Yoder was replaced after five years in the corner office by board member David Mitchell, operating partner at Francisco Ventures, which controls the privately owned company. Yesterday's announcement caught many by surprise because the company gave no public indication Mitchell was serving on an interim basis.
Davis sold Coremetrics to IBM in 2010, and has been out of the analytics business while the big data revolution exploded over the past few years. Now he's back in the middle of it, hoping to do better than Yoder, who came to Webtrends with a sales background 12 years earlier and rose to the ranks to chief executive.
The Transition and Other Questions
CMSWire asked Davis about the leadership transition and four other critical issues, including revenue growth, Webtrends' technology and the product pipeline.
CMSWire: You're following David Mitchell, who was only CEO for five months. Why the change?
Davis: David's real job is that he's an operating partner at Francisco Ventures, the private equity firm that owns Webtrends. So when the company decided to make a change with the last CEO, who'd been here five years, they put Dave in on an interim role to go in and see the real condition of the company while the search started for a long-term CEO. David's been running that search, looking around while working with the team and doing some work with cleaning up the balance sheet … David will remain on the board, but starting this week or next week will be working on another Francisco portfolio company.
CMSWire: You were a direct competitor with Alex Yoder, correct?
Davis: I was a little bit. We're in a competitive space, and we both had products in web analytics that were doing optimization. The difference was in the markets we went after. Coremetrics, when I started, was 100 percent focused on retailers. We grew out of that a little bit, but even at the time I sold it, we were still about 80 percent retail. Webtrends is much more balanced. It has retail clients, but it's probably 10 percent to 15 percent of the business. Its bigger markets are travel, financial services, media. So even though we were in the same space in sizeable companies, we would only occasionally meet on competitive deals. We knew each other , and it was competitive. I also knew the Francisco guys a long time, so it was kind of a friendly rivalry.
CMSWire: Is the technology similar? Do you feel comfortable coming into Webtrends with its approach?
Davis: When the Francisco guys first approached me about the role, there was a little bit of a balancing act on the pros and cons. On the one side, I know the technology, I know the industry, I know what customers are looking for in the space. I have a real advantage there. On the other side, you run a company for seven years like I did, you sell it and you kind of think it's time to move onto something else. The question is: Can you ever go home again? I had to weigh those two things in my mind and for me it really came down to looking at the technology. I've been out of the industry for two years and a lot happened in two years. So I really wanted to sit down and understand if there was really something compelling about the technology. What I found when I went in was that they've built some incredible things here. So that got me very excited. I saw an opportunity to come in and build this business much more aggressively based on what they built.
CMSWire: I know your company is private, but the word was the Webtrends revenue growth was slowing the past couple of years. Last I saw, it was estimated at about $100 million in revenue. Can you comment on that?
Davis: I can't comment specifically on that, but it's complicated. There are the things Webtrends had to do in its life, being a company that's been here for 20 years. When the company started, it was an enterprise software company and, starting in 2000, the trend was to switch to a SaaS model, which is what Webtrends did over time. So the SaaS business continues to grow fairly aggressively, but we've still got this large mass of people who are on enterprise with on-premise software that we're still getting revenue from. But that business is trailing off. You've got one very fast-growing business, you've got one trailing off business, and the two of those together lead to a business that's been growing, but not growing at a rate overall that it should be. The good news is that the enterprise business now is winding down to nothing, and we're getting to a space where this is just SaaS now. So we're feeling much more confident about what the growth rates are going to be like over the next couple of years."
CMSWire: What's in the pipeline?
Davis: I think the biggest thing you'll see is technologies that are allowing for more action. You've seen analytics mature from a technical analysis of where your site might be broken, to which Google keywords are working or not working, which emails are working. The industry has moved to a point where there's just so much traffic and so many people coming to these sites, you can't do a lot of that ad-hoc analysis after the fact and expect it to work for your marketing. So what's in the pipeline today, what we're really talking about is the real-time ability to make recommendations, to place ads, to place emails, based on the activity and context of the person in that very moment in time.
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