Here Steve takes us down the early history of Concur. He illustrates where the idea came from, and how the company came into being.
SM: What did the company do in the beginning? SS: We have always done the same thing. We have always been focused on automating the expense reporting process.
The way the company got started is interesting. When Mike and I were at Contact Software, in the last 9 months of our tenure there, as we were selling the company, I was traveling a fair bit. The bankers who were involved had me traveling a lot talking about the technology, about where we could take it, etc. to potential buyers, and with all that travel I never got around to filing my expense reports.
When we were dealing with Symantec to acquire Contact software, I had a chance to take a breather and one of the things the CFO told me was I had a week to get my expense reports in before the acquisition closes, and if I didn’t I was going to lose out on my expenses. As it turned out, I had about $150,000 in expense reports that I had to file. It literally took me a week to sit down and go through every single receipt, and put it on the form our company used. I am sure I lost money in the process.
As I wrapped that up, I talked with Mike and said “I can’t believe there is not a better way of doing this!” I had a three year employment contract with Symantec to honor, but I told him if you want to go start this company I know Raj is interested and I would be happy to help fund it, so let’s go solve this problem. That is the basis on which we started the company.
Mike and Raj are the guys who made a reality out of concept. They originally built a version of the product that was sold through retail stores. This is back before there was a concept of the Internet. We always knew this would end up being enterprise sales, so we made a version for the Enterprise which was a web-based solution. We were one of the first web business applications ever written.
In 1998 when we went public, we were the first web applications company to go public. We have always been at the forefront of our industry. With time it was very obvious the enterprise software licensing model had limited growth opportunities. Not every company in the world can afford to buy a license for a piece of software and then pay all of the consulting fees required to deploy it, as well as the ongoing maintenance fees.
We looked at the business model, and realized the ideal business model is one that looks like the payroll industry; something where the customer can get all of the benefits of the services, complete enterprise level functionality, but in a cost model that was comparable to outsourcing payroll and in a service model which was comparable. It had to be something that was deployed quickly, low cost, and used on a transactional basis. In this way, you are only paying for what you use.