Sramana Mitra: Can you explain the competitive landscape?
Gero Decker: We offer a business transformation suite. In its entirety, it’s a new category. If you break it down into individual components, then you have small product categories. The component that has the largest footprint is called Process Manager and Collaboration Hub. The main competitors are IBM and Software AG.
Sramana Mitra: Do you win deals when you go against them? How do you win deals? What positioning point helps you win those deals?
Gero Decker: We have very high win rates. The challenge is to get into those deals. If you look at the competitors, they have a much larger marketing and sales footprint. Every company in the world has an active IBM sales rep. It’s less of a competition on product. It’s more about who gets the eyeballs.
The big differentiation is, we’re a specialized company in what we do. We do nothing else but help companies understand, optimize, and automate their business processes. Whereas with IBM, process is just a small thing for them in comparison to their overall product offering. They can’t position and service as well. They can’t commit to customers with the same type of attention.
Sramana Mitra: What about Software AG?
Gero Decker: They are an interesting company. If you look at their revenue numbers, they are pretty much flat. They have stopped growing over the last few years. They are perceived as legacy in the marketplace although they are more specialized than IBM. They are simply perceived as the old player whereas Signavio is the young player.
Sramana Mitra: Was it difficult for you to come into the US market?
Gero Decker: The US is difficult because all of the good ones are there. You have local players in Germany and France, but these niche players are typically not as good from a product perspective. In the US, the good ones are out there and it’s very noisy in the marketplace. Everybody is shouting. As a lot of money is spent on technology, technology advertising and sales is everywhere. Cutting through that noise is a lot harder in the US.
If you contrast that with France for example, they love to be taken care of. If you have French marketing, they love it. If you count the number of vendors who do that, it’s tiny. US is more challenging. If we make it in the US and we can find success, many of the things that we learn there can be applied in the other markets.
US has been a test bed for us for the new go-to market approach. We made it work in the US and then transported it back to all of the other markets. For example, Germany is our most developed market. Still, we grew by 75% last year in Germany alone.
Sramana Mitra: It’s your home turf, so it’s easier. It’s a great story to see that a German company managed to break into the global market. You’re moving nicely and decisively. Is there any part of your journey that I didn’t ask you about?
Gero Decker: There are many aspects.
Sramana Mitra: Tell me. What do you like to talk about?
Gero Decker: I think we covered a lot of ground. It will be fascinating to see what were the interesting bits for you. Everybody has their own perception on what is interesting. I’ll tell you one funny story. This was late 2011. I was at a trade show in Europe. We sneaked in. It was a Software AG sponsored event.
We said, “If anything, we drink them into bankruptcy tonight.” I sat down at the bar to have direct access to the drinks and there was a guy sitting next to me doing the same thing. We engaged in a conversation and had a couple of drinks together. Twenty minutes into the conversation, I said, “I’m Gero. Who are you?” He said, “I know who you are.” It turned out he was one of the guys from the executive management team at Software AG who seemed to avoid the crowd at this event.
I said, “How did you hear about us?” He said, “You are winning all of the interesting opportunities against us these days. How can we not know you?” He said, “We are very paranoid about our competition. Every quarter, we reassess who our biggest threats are. The last quarter, you came up at the number one spot.” Then he said, “You know what makes me optimistic about the future? You seem to be mostly active in Germany. If you leave us the rest of the world, we’re fine. We can gladly hand you Germany.”
That was the evening when we sat together to discuss which country to go to next. We chose the United States.
Sramana Mitra: Great. Thank you for your time.