Sramana: Who was your competition?
Omar Hussain: We had a lot of other software-only competitors that were directory centric. We were the only solution that was packaged as an appliance that did not require a directory service, so from that perspective we had no direct competitors. We had an application profile generator which was a drag-and-drop mechanism for enabling a mechanism for single sign-on. We took our authentication technology from our heritage IP, which meant we had one solution that could manage log in to all applications with a single authentication, be it finger or card. People love that. We automated a huge problem. Nobody else on the market could do that.
Sramana: How much capital did you raise during your first four years?
Omar Hussain: By the end of 2007 we had raised $49 million. In 2008 we ended the year at $18 million in revenue. That was when the financial bubble burst. We were on track to do $20 million in revenue that year. For the first time, the rug got pulled out from under. Purchases slowed down. Wall Street was imploding. In the first quarter of 2009, we had to lay off 15% of the company. That forced us to look at our business and find a way to create long-term value.
One of the things that became apparent was that while single sign on presented a strong ROI across all industries, it was not a strategic purchase across all industries. It was a tactical problem that could be solved and it could provide ROI within a year. Help desk calls cost $40 to $60, so you could quantify the problem.
In 2009 we noticed that healthcare had become 50% of our business. It was the one vertical that had never slowed down. When we looked at our customers in the healthcare business, we realized that it was not a tactical purchase. It was a strategic purchase.
Sramana: What part of the healthcare market are you talking about?
Omar Hussain: Acute care hospitals globally. The people who bought our product were in a paper-based industry that was migrating to a digital document environment. They had to safeguard and protect information. They had a lot of government regulations enforced on them. The problem we were solving was not a simple log-on problem, it was an operational problem. Hospital were investing tens of millions of dollars to buy electronic records systems only to find that doctors did not want to use them. They did not want to log in and log off every time they accessed the system. The average doctor does that 8 to 10 times an hour. Hospitals could force nurses to do it, but they were wasting up to 20 minutes a shift.
We eliminated the number one barrier to EMR adoption. We looked at the market as a whole and realized that as they transaction from paper to EMR, that one of their biggest challenges to adopting EMR would be security. In early 2010 we convinced the board that we were going to deemphasize our non-healthcare business and double down on the healthcare industry. We had the opportunity to create and own a new market. That market is healthcare IT security. We had a great board, and they backed us.