Sramana: Did you take a major hit in 2008 that drove this decision?
Omar Hussain: We slowed down on growth. In 2008 we ended at $18 million, and in 2009 we only grew 10% to $20 million. The market had shifted slightly. We did not raise money because we already had capital. Once we decided we wanted to go into healthcare, it was all about focus. We had to go all into healthcare or rebuild the business cross-industry. In 2009 we really went into healthcare. In 2010 our business grew 30%. The following year it grew 48%. Suddenly we were profitable again. Last year we ended up hitting $54 million in revenue, of which 80% came from healthcare.
Sramana: What is the pricing model of your business?
Omar Hussain: We have a perpetual license model which comes with maintenance and services. We just launched our second product line last year. It is called Cortex and it is a per-user subscription model. That product is a per-user subscription model of secure HIPAA-compliant texting for healthcare. We have put a lot of marketing behind it, and we have a great install base. This is a product that was built over the past year and a half after listening to our customers.
Sramana: When people are bringing their own devices to work, how does the hospital enable HIPAA-compliant texting?
Omar Hussain: They give their employees an code to use for our app. They can download our app from the relevant app store, and you just enter your license code. The hospitals purchase it. The core product is free, and we anticipate that in the next year we will move to a per-user pricing model based on who gets value from the service.
Sramana: Where does Imprivata go from here?
Omar Hussain: Now it is a question of building a billion-dollar company over the next 10 years.
Sramana: Are you going to do that organically, or are you going to acquire companies?
Omar Hussain: It will be a combination of both. Today we have built a $100 million dollar that has a good growth trajectory. That has been built on single sign-on for hospitals. We have not taken that to the ambulatory market yet. We are just starting to penetrate new international markets. That core product still has a good runway. The TAM for authentication access management is probably $1.5 billion to $2 billion for healthcare alone.
Sramana: You are going to need other product lines to build a billion-dollar company.
Omar Hussain: Exactly. We have just launched Cortex. This is the most successful product I have ever seen in many respects. We had 40 hospitals signed up for it before we launched it. After just four months we have had 450 hospitals download it and put a subset of users on it. This product is opening a whole new market for us. Two-thirds of those downloads are in the ambulatory space. They are clinics, hospices, and home health care. They all use their phones to text patient information. This is a great solution to solve the problem.