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1Mby1M Deal Radar 2010: Quickoffice, Plano, Texas

Posted on Tuesday, Nov 23rd 2010

While it may not be practical for most companies to shift entirely to smartphones run their business, the improvements in smartphones and apps over the past few years has been only good news for companies such as Quickoffice, a maker of mobile and productivity products and services. Pre-installed on hundreds of millions of devices worldwide and also available direct-to-consumer, Quickoffice allows users to view, create, and edit Microsoft Office files and provides seamless remote access to user content stored in the cloud or on other devices.

The Plano, Texas–based company was founded in 2002 by CEO Alan Masarek. Previously, Masarek co-founded and was CEO of AdOutlet, a B2B media marketplace. As an early Palm and BlackBerry user, Masarek foresaw the growth in the smartphone market and the increasing need for productivity solutions on mobile devices. As we have seen in recent coverage smartphones have become the dominant growth engine of the mobile phone segment and as new mobile device categories like tablets are developed. It’s clear that mobile devices are rapidly moving from content consumption devices to content creation and management devices in which there is an increasingly greater need for robust productivity functionality like those.

The widest range of Quickoffice products are on Symbian’s S60, ranging from Quickoffice Premier, with Word, Excel, and PowerPoint to Quickcalendar and Quickweather, but products are also available for the iPhone and iPad, Android, Palm, and BlackBerry. Quickoffice sells its products both on an embed (OEM) model on a fee per device basis to the world’s leading handset manufacturers and through a D2C model. Pricing on the D2C side typically is in the range of $9.99 to $24.99, depending on the Quickoffice SKU.

Frost & Sullivan reports that the “office productivity market” including desktop/laptop-based office plus Web plus mobile is a $25 billion market. The Web portion of this is $3.3 billion and the mobile portion is $1.7 billion. The Web portion is expected to grow fivefold and the mobile portion fourfold between now and 2015. Within these numbers, the smartphone segment is growing more than 70% annually (roughly 300 million SPs in 2010 alone) and the tablet market at a triple-digit rate. In addition to these trends, cloud services, all of which require integration with mobile applications, are growing extremely fast in various fields, as the blog’s Thought Leaders In Cloud Computing shows. Finally, the enterprise mobility market is growing explosively as BlackBerry, with its new series of ads for the Torch, seeks to limit the growth of Android and iOS4 in the enterprise while promoting the benefits of its new touchscreen-friendly phone for mobile work environments. That being said, Quickoffice believes that greater growth is yet to come as the mobile office productivity market benefits from its “have to have” relationship with tablets and higher-end smartphones.

Quickoffice targets large Android OEM handset makers in addition to direct-to-consumer sales. The consumer audience includes business knowledge workers, professionals, students, teachers, travelers, and mobile enthusiasts. The company feels that the enterprise market use of tablets will explode in 2011 and the traditional vertical markets within the enterprise will adopt tablet-specific apps to power their workflow.

To date, the company has secured $29 million in VC funding: a $7 million Series A from Mayfield Fund, Advantage Capital Partners, and Shepherd Ventures in May 2005; an $11.5 million unattributed round from Mayfield Fund, Advantage Capital Partners, and Shepherd Ventures in January 2006; a $7 million from Series C Mayfield Fund, Advantage Capital Partners, Shepherd Ventures, Shea Ventures, and Access Industries in February 2007; a $3 million Series D from Mayfield Fund, Shepherd Ventures, Shea Ventures, and Access Industries in May 2008. In 2010, revenues will exceed $25 million, and have grown more than twenty-five-fold in five years.

The company’s initial beachhead was a Symbian platform deal signed with Nokia in 2005 in which the Quickoffice mobile office suite was embedded directly into the Symbian platform stack. More recently expansion has been through entering into new OEM relationships that were essential in a strategic push to penetrate the Android market. Through its direct OEM contracts, Quickoffice ships preloaded on the majority of the world’s Android devices.

Quickoffice says that its mobile strategy will continue to be a marriage of mobile client and cloud services. The company believes mobile e-mail will continue to be a mainstay for enterprise communication, but cloud services will begin to challenge and/or complement mobile e-mail and text messaging supremacy as a prime method of communication. The company continue to see that individuals are leveraging social media channels and cloud storage repositories to house their important files and interact with digital content. The enterprise will begin to adopt these cloud services by developing policies around its use, thereby allowing these services within their companies. As such, Quickoffice feels it is important as a mobile office productivity software provider to integrate with these latest channels of communications to facilitate a streamlined mobile office experience.

As a VC-backed company, Quickoffice is building to generate a liquidity event. While the company is on a trajectory that it believes has the scale and scope to become a successful IPO, management thinks that the more likely exit is a strategic purchase. Within that category, there are vertical and horizontal buyers. The vertical buyers are those who are most interested Quickoffice for a single operating system that is important to them. The horizontal buyers are those interested in the company’s cross-platform support, OEM relationships, and millions of customers.

Recommended Readings
The State of Enterprise Mobility (from ReadWriteWeb)
Deal Radar 2010: Avatron Software
Deal Radar 2010: Antenna Software

This segment is a part in the series : 1Mby1M Deal Radar 2010

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