E-Interview "The Applix Success Story" with Ben Plummer

The Applix Success Story: Focussing on Business Intelligence Name: Ben Plummer Title: VP Marketing & Strategic Alliances Organisation: Applix Inc. Introduction Years ago, Applix Inc. decided to sell its CRM business to Platinum Equity and to focus on Business Intelligence. Even though Applix was a succesful CRM- vendor, the company decided to completely focus on the business performance management market to increase value for customers and share holders. And the company became one of the most successful BI vendors on the market. Today, Applix is not only considered as a technological leader on the BI market, but also as a Hot Growth company- and the only one in the BI market. The US- magazine „BusinessWeek“ ranked Applix as one of the fastest growing compa- nies in the U.S.A. With 41 percent total revenue growth and 54 percent license growth in 2006 alone, Applix ranked sixth on the annual list of hot growth com- panies. In additional measures, the company ranked fifth in both profit growth and return on capital, with three-year average annual performance of 247 per- cent and 36 percent, respectively. Considering Applix focus on BI, how did this success happen? We are pleased that Mr Ben Plummer, vice president of marketing and alliances from Applix Inc., agreed on this e-interview in order to explain the succesful development of Applix from a CRM-vendor to a hot growth BI company. We hope you enjoy the interview! Best, theNetSkill-Team www.competence-site.de page 1 Dear Mr Plummer, Question 1: focussing on the BI market Years ago, Applix Inc. decided to sell their CRM business to Platinum Equity and to focus on Business Intelligence. What triggered that decision? How did this decision change Applix as a com- pany? What became important milestones on your way to BI success? Answer: Four years ago, the Company decideded to narrow its focus, improve its cash position and implement a viable operating and financial model, leading to a defensible growth position in a well-defined market. A thorough assessment of strategic alternatives led us to build from our historical strength in the analytics market. We felt that Applix TM1, the real-time analytics engine, was a key asset: a resilient technology that had effectively addressed analytic needs of corporate customers since the early 80’s. Indeed, Applix TM1 was designed specifically to facilitate spreadsheet-oriented planning and budgeting processes. As market needs shifted from historical reporting to interactive plan- ning, budgeting and forecasting, we saw significant growth potential for Applix as a pure play BI/BPM software company. Therefore, to focus and finance our growth on that platform, in January of 2003, we sold our customer relationship management (CRM) business. Over the years, Applix has been committed to providing a complete business analytics platform and, in doing so, has worked a disciplined approach to enhancing the Applix platform for use across the enterprise, balancing improvements to the user interface, to Applix TM1, the real- time engine, and to Applix’s integration with other data sources. At the user interface level, we released a Web version of the product and added dynamic views. In 2006, Applix acquired Temtec International B.V., and became the first performance man- agement software vendor to deliver the benefits of self-service analytics to users in operations. We also released modules to help automate planning, Financial Consolidations and Financial Reporting. New partners added value to the Applix platform with solutions such as sales com- pensation, risk analysis, and merchandise planning. Applix added support for 64-bit platforms such as Microsoft’s Windows Server 2003, Enterprise Edition, and became certified with various servers and databases such as SAP Business Ware- house, as well as adding support for ODBO (OLE DB for OLAP). To meet the demands of more www.competence-site.de page 2 and more enterprise-level customers, we established TM1 Center for Excellence to Advance Best Practices for BPM and BI Applications. Question 2: competition, technological leadership Today, Applix has been awarded for its technological leadership many times on the BI market. Regarding the technological leadership: what does support this leadership? How far does Applix differentiate of the BI-market and/or from well-known com- petitors? How does Applix secure this advantage? Would you say that for Applix the beginning as a CRM-vendor was important for the success on the BI- market? Can you name important steps of this learning curve? Answer: Applix is committed to providing a complete business analytics platform. This includes the ability to easily orchestrate data from all enterprise transaction stores with specific links to ERPs like SAP into an single unified analytics environment. Applix's analytics engine, TM1, is based on the industry’s leading in-memory read/write OLAP technology and leverages the scalability of 64-bit technology. This unique combination of speed and scalability - only available with Applix - allows Applix to deal with the most complex analytic applications. The final component of the Applix platform is our high par- ticipation user interface. Applix’s experience in the CRM space enabled us to see the overwhelmingly critical role of business analytics in the enterprisewide solution space. www.competence-site.de page 3 Question 3: growth on the market Besides the technological leadership,.Applix has also achieved an impressing growth on the market and was therefore honored with the „Intelligent Enterprise Editor’s Choice Awards 2006“. In "Crossing the Chasm", the way from an innovation leader to the comprehen- sive market opening up is identified as a special challenge. How did Applix meet this challenge? Answer: In 2003, David Mahoney reshaped the company’s business model, rebuilt the company’s management team, and restored Applix to profitability. The executive team focused all the company’s energy on building a traditional high margin software business and deploying resources efficiently, and eliminating any investment in delivering services, a fairly risky strategy at the time. Applix asked partners to be- come its service arm, thereby giving the partners a significant revenue opportunity and eliminat- ing the cost end complexity of managing a services business. Applix redirected resources, refocusing the engineering team in strengthening their core analytic products. With restricted marketing resources to invest into promoting the product, Dave and the management team directed the company to begin a steady but measured reintroduction of Applix to the market, customers and analysts communities. The company brought in new field leadership and undertook a nearly complete restaffing of the field organization, with high levels of expertise in the business intelligence/business performance management market, particularly in the U.S. This year, we continued our efforts with thought leadership, defining the battle as “business analytics.” Today’s business performance management (BPM) systems are the predecessor of business analytics solutions. Most of these solutions are first generation, with either narrowly focused, single-application offerings such as consolidations or reporting or applications patched or tucked together. And disjointed technologies lead to silos of information and weaken an en- terprise’s ability to act with focus and agility. Applix believes enterprises today need adept, single business analytics systems, which include both business intelligence and BPM, together providing: Improved operational visibility: on-demand access to fresh data in all operations – from Finance to Sales, Marketing, Production, and HR; Immediate views/what-if scenarios/reports for all levels of users – from the department level to the executive team; and Models that are rapidly configured and can extend into multiple departments, with little user training and minimal IT assistance. www.competence-site.de page 4 Question 4: establishing in Germany and in Europe As an US-organization, Applix has engaged in Germany and in Europe very early. What were Applix’ greatest successes in Europe and in Germany? How suc- cessful is Applix today in Europe and in Germany and what are future plans? Answer: Europe has always distinguished itself as a leading geography at Applix. With over 50% of our revenues driven through this market, Applix is proud of the team we have in place in EMEA. As we look at what drives our success and what we believe our greatest accomplishments have been, I would have to point to the strength of our team in Germany. The German market, which is heavily influenced by SAP, has continued to grow and close many of our largest orders. While many BI vendors have struggled, there Ap- plix has found that our in-memory architecture and direct linkage to SAP BW has allowed us to be evaluated and deployed has extendsions to the SAP environments and not as competitive architectures. Question 5: communication strategy, web and web 2.0 Communication and the communication industry are changing and the Internet and web 2.0 are known troughout the land. When you take a look at your communication-strategy (print, events and online) which role does the web 2.0 play for you relatively today and in the near future? During web 1.